Linking Delay Announcements, Abandonment, and Service Time

Abstract

Using call center field data, we examine the reference-dependent impact of delay announcements on both customer abandonment behavior and time spent in service. Delay announcements induce a reference point telling customers how long they must wait for service. Customers behave differently before and after this reference point. Our novel contributions include demonstrating the effects of delay announcements on service time, as well as simultaneously considering both reference-dependent abandonment behavior and reference- dependent service times. One additional minute spent waiting after the reference point increases the hazard rate of abandonment by up to 52%, a much larger effect than the hazard rate decrease from having one additional minute to go before the reference point. For those customers who do not abandon, we also observe reference-dependent behavior during service. Conditional on the same total wait in queue, one additional minute spent waiting after the reference point triggers up to 21 extra seconds in service. While longer total waiting time in queue also leads to longer service time, its effect is much smaller than this reference-dependent effect. Reference-dependent behaviors in abandonment and service impact system-level congestion in opposite directions. Therefore, managers should consider both effects when considering operational decisions, including staffing and customer prioritization.

Keywords: Delay Announcements, Service Time, Abandonment, Reference Effect