Understanding Customers Retrial in Call Centers: Preferences for Service Quality and Service Speed

32 Pages Posted: 21 Sep 2016

Date Written: September 14, 2016

Abstract

One of the key dilemmas faced by all service providers is how to trade off between high quality of services and timely responses. In reality it’s too expensive to offer both. When either features is lacking in the service systems, customers’ retrial occurs – a calling back behavior for resolving the same request. According to the reason for retrial, we classify retrial into the congestion retrial where customers abandoned in the previous call due to a slow system and the fitness retrial where customers received unsatisfactory services in the previous call due to poor quality. In this paper we want to understand retrial by connecting customers behavior with their preferences for service aspects: the speed in service access and the quality in service delivery. We use a random-coefficient dynamic structural model on a call-by-call dataset from a hybrid service system, where three service groups of different quality are sequentially brought in to serve customers. The unique feature of such hybrid service system allows us to quantify different preferences for service speed and service quality across different customers segments while confirming that in general high service quality and speedy delivery reduce retrial. Interestingly, business customers have a stronger preference for service speed compared to private customers while private customers are more sensitive to the service quality. Realizing the different preferences across customers segments, we suggest two economical viable strategies to reduce retrial by tailoring service to meet customers’ distinct preferences. The first approach, without expanding the service team, can improve business customers’ surplus by 37.9% and private customers’ surplus by 18.2% by wisely allocating the current service groups along the timeline; The second approach, by expanding the service team with more cheap labor resources of call center agents, they can improve customers’ surplus up to a certain level. However, they should be aware that the surplus will go down if there are too many call center agents because call center agents provide timely responses but not the best quality. The greatest extent of surplus increase is 2.35% for private customers and 26.3% for business customers.

Keywords: Retrial Behavior, First-Contact Resolution, Customer Service, Service Speed and Quality, Call Center, Empirical Operations Management, Structural Model

Suggested Citation

Hu, Kejia and Allon, Gad and Bassamboo, Achal, Understanding Customers Retrial in Call Centers: Preferences for Service Quality and Service Speed (September 14, 2016). Available at SSRN: https://ssrn.com/abstract=2838998 or http://dx.doi.org/10.2139/ssrn.2838998

Kejia Hu (Contact Author)

Vanderbilt University - Operations Management ( email )

Nashville, TN 37203
United States

Gad Allon

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Achal Bassamboo

Northwestern University - Department of Managerial Economics and Decision Sciences (MEDS) ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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