How Should Time Estimates be Structured to Increase Customer Satisfaction?

Chicago Booth Research Paper Forthcoming

Forthcoming at Management Science

45 Pages Posted: 30 Aug 2024

See all articles by Beidi Hu

Beidi Hu

University of Chicago - Booth School of Business

Celia Gaertig

University of California, Berkeley

Berkeley J. Dietvorst

University of Chicago - Marketing Management

Date Written: August 01, 2024

Abstract

Businesses across industries, such as food delivery apps and GPS navigation systems, routinely provide customers with time estimates in inherently uncertain contexts. How does the format of these time estimates affect customers’ satisfaction? In particular, should companies provide customers with a point estimate representing the best estimate, or should they communicate the inherent uncertainty in outcomes by providing a range estimate? In eight pre-registered experiments (N = 5,323), participants observed time estimates provided by an app, and we manipulated whether the app presented the time estimates as a point estimate (e.g., “Your food will arrive in 45 minutes.”) or a range (e.g., “Your food will arrive in 40-50 minutes.”). After participants learned about the app’s prediction performance by sampling a set of past outcomes, we measured participants’ evaluation of the app. We find that participants judged the app more positively when it provided a range rather than a point estimate. These results held across different domains, different time durations, different underlying outcome distributions, and an incentive-compatible design. We also find that this preference is not simply due to people’s dislike of late outcomes, as participants also rated ranges more positively than conservative point estimates corresponding to the upper (i.e., later) bound of the range. These findings suggest that companies can increase customer satisfaction with realized time estimates by communicating the uncertainty inherent in these time estimates.

Keywords: uncertainty, time estimates, time perception, numerical cognition

Suggested Citation

Hu, Beidi and Gaertig, Celia and Dietvorst, Berkeley, How Should Time Estimates be Structured to Increase Customer Satisfaction? (August 01, 2024). Chicago Booth Research Paper Forthcoming, Forthcoming at Management Science, Available at SSRN: https://ssrn.com/abstract=4927151 or http://dx.doi.org/10.2139/ssrn.4927151

Beidi Hu (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S Woodlawn Ave
Chicago, IL 60637
United States

Celia Gaertig

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

Berkeley Dietvorst

University of Chicago - Marketing Management ( email )

Chicago, IL 60637
United States

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