Understanding the Joint Value of High-Frequency Service Metrics and Post-Purchase Perception

48 Pages Posted: 16 Jul 2015 Last revised: 7 Aug 2020

See all articles by Jihoon Cho

Jihoon Cho

Kansas State University - College of Business Administration

Anocha Aribarg

University of Michigan at Ann Arbor - Stephen M. Ross School of Business

Puneet Manchanda

University of Michigan, Stephen M. Ross School of Business

Date Written: August 1, 2020

Abstract

The advent of digitization has allowed firms to collect high-frequency data - subjective and objective - to monitor their service performance. This paper proposes a methodological framework to help firms understand the value of collecting these data. We apply the framework to novel high-frequency, individual-level, cross-sectional and time-series measures of subjective post-purchase perceptions and objective operational metrics from a quick service restaurant and an auto rental company. Our approach allows for the quantification of statistical and economic significance of collecting high-frequency subjective service data in the presence of the objective counterpart. The value of collecting subjective data is estimated to be around $9.1 million at a 20% change in objective metrics and is found to be the highest for frequent customers who have not provided ratings frequently. We also find the presence of both within- and across-individual selection in survey response, and the bias stemming from within-individual selection can be more than twice as large as that from across-individual selection. These results advance the literature on measurement and management of service performance and provide insights to managers for forecasting and resource allocation.

Keywords: service quality, high-frequency data, within-individual selection, across-individual selection

JEL Classification: L1, L8, M3

Suggested Citation

Cho, Jihoon and Aribarg, Anocha and Manchanda, Puneet, Understanding the Joint Value of High-Frequency Service Metrics and Post-Purchase Perception (August 1, 2020). Ross School of Business Paper No. 1283, Available at SSRN: https://ssrn.com/abstract=2630898 or http://dx.doi.org/10.2139/ssrn.2630898

Jihoon Cho (Contact Author)

Kansas State University - College of Business Administration ( email )

Manhattan, KS 66506
United States

Anocha Aribarg

University of Michigan at Ann Arbor - Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

Puneet Manchanda

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-936-2445 (Phone)
734-936-8716 (Fax)

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