1. HOW DISCONFIRMATION, PERCEPTION AND ACTUAL WAITING TIMES IMPACT CUSTOMER SATISFACTION Authors: Mark M Davis Janelle Heineke Presented by: Yvette Guajardo

2. Objective  To analyze and compare the results of both the disconfirmation approach and the perception approach to measuring satisfaction with waiting for service.  If perception model is more appropriate for relating to customer satisfaction, then to understand satisfaction only perception data is required.  If disconfirmation approach is superior, then expectation and perception data.  This study also investigates customer satisfaction with actual waiting times, and compares these results with those obtained with the disconfirmation and perception models.

3. Previous Work  Previous research on customer satisfaction with respect to waiting in service operations can be broken down into three areas:  1. Developing the methodology for defining customer satisfaction  2. Measuring customer satisfaction  3. Identifying the factors that affect the level of customer satisfaction

4. Previous Work  Defining customer satisfaction in service operations has been approached in two general ways:  Satisfaction as a function of disconfirmation  Satisfaction as a function of perception  Satisfaction as a function of disconfirmation  One line research has attempted to define satisfaction in terms of disconfirmation. (Anderson, 1973) Satisfaction = Perception – Expectation

5. Previous Work  Customer Expectations of service are set in two basic ways:  Prior to the customer’s first encounter with the service firm, via advertising and customer word of mouth  After a previous encounter (or encounters) with the firm, from personal experience.  Anderson and Swan proposed that there are two dimensions to the expectation construct:  The level of service desired by the customer and the level of service predicted by the customer High Customer Satisfaction: Performance ≥ customer’s desired service level. Customer Satisfaction: desired level > performance ≥ predicted levels of service Customer Dissatisfaction: occurs when performance is less than both the customer’s desired and predicted levels of service

6. Previous Work  Customer Satisfaction as a function of perception: satisfaction depends primarily on the customer’s perception of service performance rather than on the disconfirmation between perception and expectation  Satisfaction = Perception Perception means the customer’s perception of actual performance, implying that perception and “objective” actual performance are not one and the same.

7. Previous Work  Measuring Customer Satisfaction:  Many factors can contribute to customer’s satisfaction with the level of service received: - A single global indicator of a customer’s reaction to the service experience (most common measure) – a single measure’s validity often suspect when the construct is complex. - A more valid and reliable measure of customer satisfaction can be obtained with a customer survey instrument which uses the multi-item/specific approach – several measures of satisfaction are obtained.

8. Methodology  Studies were conducted by Davis and Vollmann (1990) and Davis and Maggard (1990).  A major fast-food chain was selected for administering the survey instrument.  Waiting times for randomly selected customers were recorded with a stop watch while the customer waited in the line to place their orders.  Immediately after being served, the customer whose waiting times had been recorded were asked to complete a brief self-administered survey which asked various questions.

9. Data Collection  The survey asked various questions, including their levels of satisfaction with various aspects of the operation.  Customers were also asked how long they had expected to wait prior to entering the store and how long they perceived they had waited.  Satisfaction was measure on a 1-5 Likert scale.  Two questions relating to the customer’s satisfaction with the waiting time before service were averaged to develop a measure for satisfaction with this initial wait (WaitSat): “How satisfied are you with how long you had to wait in line from the time you walked in to when you placed your order?” “What is your opinion of the overall speed of service you received from when you first entered to when you began placing your order?”

10. Analysis and Results  WaitSat values were related to three different independent variables:  Actual customer waiting times  Perceived customer waiting times  Expected waiting times Results: There is a correlation between actual wait time and perceived wait time. Disconfirmation is the difference between the expected wait and the perceived wait. The customer satisfaction with waiting time is related to all of the four measure. The study also confirms that customer satisfaction with waiting time is inversely related to both the perceived waiting time and the actual waiting time.

11. Conclusion  Theory perspective – findings support the argument that perception of waiting time is a better predictor of customer satisfaction with waiting than either actual waiting time or the disconfirmation between perceived waiting time and expected waiting time.  Analyses perspective – The coefficient for actual wait was larger than for either perceived wait or for disconfirmation, indicating that actual waiting time exerts a stronger influence over customer satisfaction with waiting.

12. Managerial Perspective  The longer the actual wait, the more dissatisfied the customer becomes. Therefore it is always critical to improve actual process performance in order to reduce waiting times because actual waiting times are a key driver of satisfaction with waiting.  Managers can influence the level of dissatisfaction with waiting, by managing customer perceptions of waiting times.  Service managers must continue to look for new approaches not only to reduce actual waiting times but also to explore new ways of improving customer satisfaction with a given waiting time.