KING FAHD UNIVERSITY OF PETROLEUM AND MINERALS CEM 515 TERM PAPER CUSTOMER SATISFACTION (CUSTOMER REACTIONS TO WAITING) BY FAWAZ AL-SHAHRANI ID#

 OUTLINE: - Introduction - Justice and service delivery - Managing procedural justice through waiting time - Waiting in line - Study - Measures - Discussion - The relationship between customer loyalty and customer satisfaction

INTRODUCTION: INTRODUCTION: - Waiting line is considered as an important part of service experience. - Waiting line is considered as an important part of service experience. - Having to wait is regarded as an inconvenience that negatively affects customer perceptions.

 JUSTICE AND SERVICE DELIVERY: - The three major dimensions of justice: 1. Distributive justice 2. Procedural justice 3. Interactional justice

 MANAGING PROCEDURAL JUSTICE THROUGH WAITING TIME: - How to decease the actual length of the wait ( better technology, more service provider during peak times) - Managing perceived waiting time equals reducing the actual waiting time.

 WAITING IN LINE: - Commonly used at service organizations - Two types of waiting lines: Multiple-line, multiple server systems Multiple-line, multiple server systems Commonly found in grocery stores Single-line, multiple server systems. A single line is formed and the next available server serves the first customer Single-line, multiple server systems. A single line is formed and the next available server serves the first customer (commonly found in banks)

- When FIFO principle (first-in, first-out) is violated, customer satisfaction will be affected. - Give that a single-line system will appear longer but will move more quickly than a multiple-line system - Customers can be expected to prefer single-line systems over multiple-line systems, because single-line can be characterized by faster and more visible progress.

- However, line speeds may differ due to unpredictable circumstances (e.g. slow service employee) - Customers fear of social injustice can often dominate queue-waiting times in determining customer reactions - An increase in customers perceived waiting time has been shown to have a negative relationship with overall service evaluations

 STUDY: customers of two fast-food restaurants were asked to fill out a survey about their experience at the restaurant - Customers were observed as they entered the restaurant and the actual waiting time was recorded - After customers had received their food, they were asked to fill out a questionnaire

 MEASURES: - Reactions to the wait were assessed with two sets of measure: effective reactions to the wait and acceptability of the wait - Asking how reasonable/acceptable the amount of time waited was

 DISSCUSSION: - Results show that the use of a single-line system reduces customers perceived waiting time - Some people might prefer a single-line system because of the assurance that any customer arriving later will also be served later - The extent to which customers rushed and feel under time pressure may affect their reactions

 THE RELATIONSHIP BETWEEN CUSTOMER LOYALTY AND CUSTOMER SATISFACTION: - It was found that when company retains just 5 percent more of its customers, profits increase by 25 percent to 125 percent - The increased profit from loyalty comes from reduced marketing costs, increased sales and reduced operational costs

- Loyal customers not only require less information themselves, they also serve as an information source for other customers - Loyalty: There are three distinctive approaches to measure loyalty: 1. Behavioural measurements 2. Attitudinal measurements 3. Composite measurements

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