TITLE

The impact of waiting time guarantees on customer's waiting experiences

AUTHOR(S)
Kumar, Piyush; Kalwani, Manohar U.; Dada, Maqbool
PUB. DATE
December 1997
SOURCE
Marketing Science;1997, Vol. 16 Issue 4, p295
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Customers often have to wait during the process of acquiring and consuming many products and services. These waiting experiences are typically negative and have been known to affect customers' overall satisfaction with the product or service. To better manage these waiting experiences, many firms have instituted a variety of programs not only to reduce the actual duration of the wait but also to improve customers' perceptions of it. In this paper, we examine the impact of one such initiative, namely, the institution of a waiting time guarantee, on customers' waiting experiences. A waiting time guarantee is a commitment from a firm to serve its customers within a specified period of time. If the firm fails to meet this commitment for some customers then it compensates them for the delay. Today, a large number of firms in a variety of industries such as fast food, banking, industrial distribution, and healthcare offer such time guarantees to their customers. We develop a utility theory-based model of customers' satisfaction with waiting in line. The model is based upon the assumption that when a customer joins a queue he or she has some prior beliefs about the distribution of service times at the firm. The customer estimates the likely duration of the waiting time on the basis of these beliefs about the service times and the observed queue length. We further assume that as the customer observes the service times for other customers who are ahead in the queue, he or she successively updates these beliefs about the distribution of service times in a Bayesian manner. We then posit that the customer's satisfaction both during as well as the end of the wait is determined by the difference between the customer's updated and the prior estimates of the total wailing time. We apply the model to derive select hypotheses pertaining to the impact of a waiting lime guarantee on customers' wailing experiences. These hypotheses are based upon the assumption that an offer of a tim...
ACCESSION #
224274

 

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