44 Pages Posted: 17 Sep 2013 Last revised: 26 Aug 2014
Date Written: September 16, 2013
For many consumer-intensive (B2C) services, delivering memorable customer experiences to maximize customer satisfaction can be a source of competitive advantage. Yet, there is no clear guideline available for service encounter design that accounts for customer behavior. In this paper, we show how experiential services should be sequenced and timed to maximize satisfaction of customers who are subject to memory decay and acclimation. We find that memory decay favors positioning the highest service level near the end, whereas acclimation favors maximizing the gradient of service level. Although memory decay and acclimation lead to the same design individually, they can act as opposing forces when considered jointly. Specifically, together, they maximize the gradient of service level near the end, which may result in (i) sequencing activities in a U-shaped fashion and (ii) lengthening the duration of activities with the lowest service levels. Based on the analytical characterization of the optimal sequence and timing of activities, we propose heuristics to design the service encounter. Overall, this paper shows that service experiences can be engineered to enhance customer satisfaction.
Keywords: service design, experience, scheduling, social psychology, behaviral operations, heuristics
Suggested Citation: Suggested Citation
Das Gupta, Aparupa and Karmarkar, Uday S. and Roels, Guillaume, The Design of Experiential Services with Acclimation and Memory Decay: Optimal Sequence and Duration (September 16, 2013). Available at SSRN: https://ssrn.com/abstract=2326559 or http://dx.doi.org/10.2139/ssrn.2326559