WAITING TIME MANAGEMENT Chapter 15 WAITING TIME MANAGEMENT McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.
LEARNING OBJECTIVES Emphasize the importance of providing fast service as a competitive advantage to companies. Show the relationship between customer expectations, customer perceptions, and customer satisfaction as they pertain to waiting time. Introduce the different factors that can affect customer satisfaction with waiting time, and provide a framework for showing managers which of these factors are under their control. Demonstrate how service managers can design their operations to provide faster service without incurring any additional costs. Illustrate how technology can assist companies in providing faster service to their customers.
Perceived Waiting Time MANAGEMENT OF CUSTOMER WATING TIMES Actual Waiting Time Perceived Waiting Time
Exhibit 15.1 Cost Waiting Time Short Long Cost of Waiting THE TRADE-OFF BETWEEN THE COST OF PROVIDING SERVICE AND THE COST OF HAVING CUSTOMERS WAIT Cost Waiting Time Short Long Cost of Waiting Cost of Service Total Cost
Exhibit 15.2 Expectations SATISFACTION Performance Disconfirmation THE ROLE OF SATISFACTION IN A CUSTOMER BEHAVIOR MODEL Expectations SATISFACTION Performance Disconfirmation Intentions Attitudes Future Behavior Source: Oliver, R.L. “A Cognitive Model of the Antecedents and Consequences of Satisfaction Decisions,” Journal of Marketing Research 17, November 1980.
THE ECONOMICS OF WAITING LINES Two Types of Customers Internal Customers External Customers
COST OF WATING FOR EXTERNAL CUSTOMERS Exhibit 15.3 COST OF WATING FOR EXTERNAL CUSTOMERS + $40.00 Financial Impact + $20.00 - $20.00 - $40.00 <1 min. 1-3 min. >3 min. Waiting Time
Uncomfortable versus Comfortable Unexplained versus Explained Factors Affecting Customer Satisfaction with Waiting Firm-Related Factors Unfair versus Fair Uncomfortable versus Comfortable Unexplained versus Explained Initial versus Subsequent
Customer-Related Factors Solo versus Group Factors Affecting Customer Satisfaction with Waiting Customer-Related Factors Solo versus Group More Valuable versus Less Valuable Services Customer Value Systems Customer’s Current Attitude
Elements of the Service Delivery System Design Process NEW APPROACH TO SERVICE SYSTEM DESIGN Elements of the Service Delivery System Design Process Accurate Forecasting of Demand Work Station Design Reduced Setup Times Cross-Training of Employees
Exhibit 15.4 WHY FASTER SERVICE IS STILL “OPTIMAL” W2 W1 S1 S2 Cost of Waiting Cost Cost of Service Short Long Waiting Time
KEY TERMS Actual Waiting Time Back-of-the-House Customer’s Expectations Customer Satisfaction Disconfirmation External Customers Front-of-the-House Halo Effect Internal Customers Perceived Waiting Time