Interactions and consequences of inertia and switching costs

Purpose: Service research typically relates switching costs to customer loyalty, and portrays them as effective switching deterrents that engender harmful word-of-mouth (WOM). Rather than to customer loyalty, this paper aims to relate switching costs to consumer inertia, and show that while switching costs may result in customer retention, they can engender positive and negative WOM. This depends on whether the inertia stems from satisfaction or indifference. Design/methodology/approach: A mall-intercept survey investigated 518 customers' perceptions of their mobile phone service providers. Structural equation modelling fitted the data to the conceptual model. Findings: Switching costs deterred switching and engendered negative WOM, but only with low-inertia customers. With high-inertia customers, retention and WOM behaviours depended on whether the inertia stemmed from satisfaction or indifference. Satisfied customers with high switching costs tended to stay, gave more positive and less negative WOM. With indifferent customers, switching costs were unrelated to retention or WOM behaviours. Research limitations/implications: While they may be perceived negatively, switching costs can engender PWOM. Hence, research should not consider switching costs alone without considering the context that produces them. Practical implications: Service providers should segment their customers into low-inertia, high-inertia/satisfied and high-inertia/indifferent, and target each segment differently. By converting customers into the high-inertia/satisfied segment, service providers can make the best use of switching costs – not only in the traditional sense as a barrier to defection, but also as a way of generating positive WOM. Originality/value: This study is the first to consider the role of inertia with switching costs, positive WOM, and negative WOM. The findings suggest that past studies portraying switching costs as negative impediments that evoke only negative WOM might be misleading.

Smart demand side management of low-voltage distribution networks using multi-objective decision making

A novel intelligent online demand side management system is proposed for peak load management in low-voltage distribution networks. This method uses low-cost controllers with low-bandwidth two-way communication installed in custumers’ premises and at distribution transformers to manage the peak load while maximising customer satisfaction. A multi-objective decision making process is proposed to select the load(s) to be delayed or controlled. The efficacy of the proposed control system is verified by simulation of three different feeder types.

Urban transit quality of service : user perception and behaviour

Despite its potential multiple contributions to sustainable policy objectives, urban transit is generally not widely used by the public in terms of its market share compared to that of automobiles, particularly in affluent societies with low-density urban forms like Australia. Transit service providers need to attract more people to transit by improving transit quality of service. The key to cost-effective transit service improvements lies in accurate evaluation of policy proposals by taking into account their impacts on transit users. If transit providers knew what is more or less important to their customers, they could focus their efforts on optimising customer-oriented service. Policy interventions could also be specified to influence transit users’ travel decisions, with targets of customer satisfaction and broader community welfare. This significance motivates the research into the relationship between urban transit quality of service and its user perception as well as behaviour. This research focused on two dimensions of transit user’s travel behaviour: route choice and access arrival time choice. The study area chosen was a busy urban transit corridor linking Brisbane central business district (CBD) and the St. Lucia campus of The University of Queensland (UQ). This multi-system corridor provided a ‘natural experiment’ for transit users between the CBD and UQ, as they can choose between busway 109 (with grade-separate exclusive right-of-way), ordinary on-street bus 412, and linear fast ferry CityCat on the Brisbane River. The population of interest was set as the attendees to UQ, who travelled from the CBD or from a suburb via the CBD. Two waves of internet-based self-completion questionnaire surveys were conducted to collect data on sampled passengers’ perception of transit service quality and behaviour of using public transit in the study area. The first wave survey is to collect behaviour and attitude data on respondents’ daily transit usage and their direct rating of importance on factors of route-level transit quality of service. A series of statistical analyses is conducted to examine the relationships between transit users’ travel and personal characteristics and their transit usage characteristics. A factor-cluster segmentation procedure is applied to respodents’ importance ratings on service quality variables regarding transit route preference to explore users’ various perspectives to transit quality of service. Based on the perceptions of service quality collected from the second wave survey, a series of quality criteria of the transit routes under study was quantitatively measured, particularly, the travel time reliability in terms of schedule adherence. It was proved that mixed traffic conditions and peak-period effects can affect transit service reliability. Multinomial logit models of transit user’s route choice were estimated using route-level service quality perceptions collected in the second wave survey. Relative importance of service quality factors were derived from choice model’s significant parameter estimates, such as access and egress times, seat availability, and busway system. Interpretations of the parameter estimates were conducted, particularly the equivalent in-vehicle time of access and egress times, and busway in-vehicle time. Market segmentation by trip origin was applied to investigate the difference in magnitude between the parameter estimates of access and egress times. The significant costs of transfer in transit trips were highlighted. These importance ratios were applied back to quality perceptions collected as RP data to compare the satisfaction levels between the service attributes and to generate an action relevance matrix to prioritise attributes for quality improvement. An empirical study on the relationship between average passenger waiting time and transit service characteristics was performed using the service quality perceived. Passenger arrivals for services with long headways (over 15 minutes) were found to be obviously coordinated with scheduled departure times of transit vehicles in order to reduce waiting time. This drove further investigations and modelling innovations in passenger’ access arrival time choice and its relationships with transit service characteristics and average passenger waiting time. Specifically, original contributions were made in formulation of expected waiting time, analysis of the risk-aversion attitude to missing desired service run in the passengers’ access time arrivals’ choice, and extensions of the utility function specification for modelling passenger access arrival distribution, by using complicated expected utility forms and non-linear probability weighting to explicitly accommodate the risk of missing an intended service and passenger’s risk-aversion attitude. Discussions on this research’s contributions to knowledge, its limitations, and recommendations for future research are provided at the concluding section of this thesis.

Psychological stress and employee engagement

“The challenge today is not just retaining talented people, but fully engaging them, capturing their minds and hearts at each stage of their work lives” (Kaye & Jordan-Evans, 2003, p. 11). Engaged employees produce positive work outcomes such as increased productivity satisfaction, and reduced turnover (Kahn, 1990, 1992; Saks, 2006). Engaged employees also impact on customers and co-workers’ positive experiences such as increased customer satisfaction (Wagner & Harter, 2006). Further, engaged employees demonstrate higher levels of trust in management and share more positive experiences with co-workers than disengage employees (Payne, Cangemi, Fuqua, & Muhleakamp, 1998). Past studies show that having a high proportion of engaged employees increases organizational performance, such as profitability and reputation (Wagner & Harter, 2006; Fleming & Asplund, 2007; Ketter, 2008). Having experienced the benefits of having engaged employees, organizations have become more aware of this issue and have been focusing on facilitating engagement climate within workplaces. Recently, an interest in positive psychology, instead of negative aspects of human behaviours, has become a focus for both scholars and practitioners. The trend towards positive psychology has led to the emergence of the concept of work engagement(Chughtai & Buckley, 2008). This article reviews literatures in the area of positive psychology and psychological stress, and discusses how organizations can increase work engagement among their organizational members. The remainder of this article is organised in four sections. First, we define work engagement as used in this article and psychological outcomes of work engagement. Second, we identify ways to increase work engagement among employees. Following this, we further discuss how gender roles influence individuals’ engagement at work. The final sections conclude the paper with a discussion of the practical implications.

Agility in consumer retail: sense-response alignment through the eyes of customers

In hyper competition, firms that are agile: sensing and responding better to customer requirements tend to be more successful and achieve supernormal profits. In spite of the widely accepted importance of customer agility, research is limited on this construct. The limited research also has predominantly focussed on the firm’s perspective of agility. However, we propose that the customers are better positioned to determine how well a firm is responding to their requirements (aka a firm’s customer agility). Taking the customers’ stand point, we address the issue of sense and respond alignment in two perspectives-matching and mediating. Based on data collected from customers in a field study, we tested hypothesis pertaining to the two methods of alignment using polynomial regression and response surface methodology. The results provide a good explanation for the role of both forms of alignment on customer satisfaction. Implication for research and practice are discussed.

Voltage regulation, power balancing and battery storage discharge control by smart demand side management and multi-objective decision making

A novel intelligent online demand side management system is proposed for peak load management. The method also regulates the network voltage, balances the power in three phases and coordinates the battery storage discharge within the network. This method uses low cost controllers with low bandwidth two-way communication installed in costumers' premises and at distribution transformers to manage the peak load while maximizing customer satisfaction. A multi-objective decision making process is proposed to select the load(s) to be delayed or controlled. The efficacy of the proposed control system is verified through an event-based developed simulation in Matlab.

On-line Demand Management of Low Voltage Residential Distribution Networks in Smart Grids

A novel intelligent online demand management system is discussed in this chapter for peak load management in low voltage residential distribution networks based on the smart grid concept. The discussed system also regulates the network voltage, balances the power in three phases and coordinates the energy storage within the network. This method uses low cost controllers, with two-way communication interfaces, installed in costumers’ premises and at distribution transformers to manage the peak load while maximizing customer satisfaction. A multi-objective decision making process is proposed to select the load(s) to be delayed or controlled. The efficacy of the proposed control system is verified by a MATLAB-based simulation which includes detailed modeling of residential loads and the network.

Task-relationship-self : a framework for understanding service encounter behaviors

Research conducted over past decades has investigated selected service encounter behaviors from either a customer or service provider perspective. However, a comprehensive, dual-perspective framework is lacking. Such a framework is needed to organize knowledge of these behaviors, and thereby provide structure, clarity, and parsimony to the field. This paper describes a three-tier framework of service encounter behavior that was developed by applying grounded theory principles to interviews with customers, service employees, and other stakeholders. These informants described many ways in which they behave when executing service exchanges, dealing with service difficulties, and managing themselves in the process. Using an iterative inductive approach, a conceptual framework was developed in which specific (Tier 1) behaviors were placed within broader (Tier 2) categories, and these lower classification levels were, in turn, interpreted within a conceptual space defined by the (Tier 3) dimensions of task, relationship, and self. This framework was then elaborated and refined by reference to the psychology and marketing literature, a set of 157 audio-recorded service interactions, and an expert panel study. The paper includes comparisons between the framework and those previously proposed, propositions regarding service encounter processes and outcomes, and implications for future research and practice.

Improving US airport taxicab services through governance arrangements

Most airports internationally have implemented customer satisfaction programs into their operations to increase non-aeronautical revenues. In the US, taxicabs are an essential airport transport mode given the limited public transport options available. Effective airport taxicab planning can increase airport customer satisfaction levels, as well as facilitate handling increased airport passenger volumes. However, little is known on how US airports have adapted their governance practices from a traditional hierarchical to a network approach in their efforts to undertake airport taxicab planning initiatives since the deregulation of the transportation industry. Data acquired from 51 US hub airports is used to examine their existing taxicab planning practices. The findings offer how US airports can modify governance processes in their airport taxicab planning processes to better support increases in the customer satisfaction levels of airport taxicab patrons.

Commercial friendships between gay salesmen and straight female customers

Perhaps it is now sacrosanct in marketing to contemplate that many service encounters, especially those in retail settings, are social encounters in which bonds between and among customers and employees are critical drivers of consumption (Beatty et al., 1996; Rosenbaum, 2006). Indeed, within retail settings, it is often possible for salespeople and customers to form so-called “commercial friendships” (Price and Arnould, 1999). These friendships result in both salespeople and their customers having social interactions that are close to those experienced in personal friendships (Swan et al., 2001), and which are extremely satisfying for all parties. Outside of marketing, the social science literature (Grigoriou, 2004; Rumens, 2008; Russell, DelPriore, Butterfield, and Hill, 2013) and popular press (de la Cruz and Dolby, 2007; Hopcke and Rafaty, 1999; Tilmann-Healy, 2001, Whitney, 1990) is replete with knowledge regarding the “absolutely fabulous” friendships (Hopcke and Rafaty, 1999) that often form between gay men and straight women. In fact, Western culture regularly highlights the compatibility of gay men and straight women in film, television, and writing, to the extent that they have now influenced popular thinking on the topic, so that gay men and straight females are viewed as sharing common plights and interests (Rumens, 2008). Yet, thus far, marketing researchers have looked askance at the effect of friendships between gay male employees and heterosexual female customers in consumption settings, such as retail stores and boutiques. Indeed, with the exception of Peretz’s (1995) participant observation regarding how young and outwardly gay salesmen use their ambiguous gender to sell women’s clothing, in a Paris-based luxury boutique, any theoretical explorations regarding retail-based commercial friendships between gay salesmen and female customers are non-existent—until now. This research addresses this apparent chasm in the literature by putting forth an original framework that shows how the emotional closeness between gay salesmen and female customers, due to the absence of sexual interest and inter-female competition, results in an intense emotional closeness, that facilitates pleasurable retail transactions, customer satisfaction, loyalty, and positive word-of-mouth. In doing so, this work extends the commercial friendship paradigm by considering retail-based, commercial friendships between an under-researched marketplace dyad; gay men and straight females. It is worth noting here that some straight women may find the idea of commercial friendships with gay salesmen as undesirable, due to the very notion of having relationships with retail organizations or employees (Noble and Phillips, 2004), or a personal disdain for homosexuality.

Energy efficient home with price sensitive stochastically programmable TCAs

Introduction of dynamic pricing in present retail market, considerably affects customers with an increased cost of energy consumption. Therefore, customers are enforced to control their loads according to price variation. This paper proposes a new technique of Home Energy Management, which helps customers to minimize their cost of energy consumption by appropriately controlling their loads. Thermostatically Controllable Appliances (TCAs) such as air conditioner and water heater are focused in this study, as they consume more than 50% of the total household energy consumption. The control process includes stochastic dynamic programming, which incorporated uncertainties in price and demand variation. It leads to an accurate selection of appliance settings. It is followed by a real time control of selected appliances with its optimal settings. Temperature set points of TCAs are adjusted based on price droop which is a reflection of actual cost of energy consumption. Customer satisfaction is maintained within limits using constraint optimization. It is showed that considerable energy savings is achieved.

Optimizing preventative maintenance strategies for linear assets

Linear assets are engineering infrastructure, such as pipelines, railway lines, and electricity cables, which span long distances and can be divided into different segments. Optimal management of such assets is critical for asset owners as they normally involve significant capital investment. Currently, Time Based Preventive Maintenance (TBPM) strategies are commonly used in industry to improve the reliability of such assets, as they are easy to implement compared with reliability or risk-based preventive maintenance strategies. Linear assets are normally of large scale and thus their preventive maintenance is costly. Their owners and maintainers are always seeking to optimize their TBPM outcomes in terms of minimizing total expected costs over a long term involving multiple maintenance cycles. These costs include repair costs, preventive maintenance costs, and production losses. A TBPM strategy defines when Preventive Maintenance (PM) starts, how frequently the PM is conducted and which segments of a linear asset are operated on in each PM action. A number of factors such as required minimal mission time, customer satisfaction, human resources, and acceptable risk levels need to be considered when planning such a strategy. However, in current practice, TBPM decisions are often made based on decision makers’ expertise or industrial historical practice, and lack a systematic analysis of the effects of these factors. To address this issue, here we investigate the characteristics of TBPM of linear assets, and develop an effective multiple criteria decision making approach for determining an optimal TBPM strategy. We develop a recursive optimization equation which makes it possible to evaluate the effect of different maintenance options for linear assets, such as the best partitioning of the asset into segments and the maintenance cost per segment.

Frequent (flier) frustration and the dark side of word‐of‐web: exploring online dysfunctional behavior in online feedback forums

Purpose Following the perspective of frustration theory customer frustration incidents lead to frustration behavior such as protest (negative word‐of‐mouth). On the internet customers can express their emotions verbally and non‐verbally in numerous web‐based review platforms. The purpose of this study is to investigate online dysfunctional customer behavior, in particular negative “word‐of‐web” (WOW) in online feedback forums, among customers who participate in frequent‐flier programs in the airline industry. Design/methodology/approach The study employs a variation of the critical incident technique (CIT) referred to as the critical internet feedback technique (CIFT). Qualitative data of customer reviews of 13 different frequent‐flier programs posted on the internet were collected and analyzed with regard to frustration incidents, verbal and non‐verbal emotional effects and types of dysfunctional word‐of‐web customer behavior. The sample includes 141 negative customer reviews based on non‐recommendations and low program ratings. Findings Problems with loyalty programs evoke negative emotions that are expressed in a spectrum of verbal and non‐verbal negative electronic word‐of‐mouth. Online dysfunctional behavior can vary widely from low ratings and non‐recommendations to voicing switching intentions to even stronger forms such as manipulation of others and revenge intentions. Research limitations/implications Results have to be viewed carefully due to methodological challenges with regard to the measurement of emotions, in particular the accuracy of self‐report techniques and the quality of online data. Generalization of the results is limited because the study utilizes data from only one industry. Further research is needed with regard to the exact differentiation of frustration from related constructs. In addition, large‐scale quantitative studies are necessary to specify and test the relationships between frustration incidents and subsequent dysfunctional customer behavior expressed in negative word‐of‐web. Practical implications The study yields important implications for the monitoring of the perceived quality of loyalty programs. Management can obtain valuable information about program‐related and/or relationship‐related frustration incidents that lead to online dysfunctional customer behavior. A proactive response strategy should be developed to deal with severe cases, such as sabotage plans. Originality/value This study contributes to knowledge regarding the limited research of online dysfunctional customer behavior as well as frustration incidents of loyalty programs. Also, the article presents a theoretical “customer frustration‐defection” framework that describes different levels of online dysfunctional behavior in relation to the level of frustration sensation that customers have experienced. The framework extends the existing perspective of the “customer satisfaction‐loyalty” framework developed by Heskett et al.

Can’t see the trees for the forest? Why IS-ServQual items matter

Despite longstanding concern with the dimensionality of the service quality construct as measured by ServQual and IS-ServQual instruments, variations on the IS-ServQual instrument have been enduringly prominent in both academic research and practice in the field of IS. We explain the continuing popularity of the instrument based on the salience of the item set for predicting overall customer satisfaction, suggesting that the preoccupation with the dimensions has been a distraction. The implicit mutual exclusivity of the items suggests a more appropriate conceptualization of IS-ServQual as a formative index. This conceptualization resolves the paradox in IS-ServQual research, that of how an instrument with such well-known and well-documented weaknesses continue to be very influential and widely used by academics and practitioners. A formative conceptualization acknowledges and addresses the criticisms of IS-ServQual, while simultaneously explaining its enduring salience by focusing on the items rather than the “dimensions.” By employing an opportunistic sample and adopting the most recent IS-ServQual instrument published in a leading IS journal (virtually, any valid IS- ServQual sample in combination with a previously tested instrument variant would suffice for study purposes), we demonstrate that when re-specified as both first-order and second-order formatives, IS-ServQual has good model quality metrics and high predictive power on customer satisfaction. We conclude that this formative specification has higher practical use and is more defensible theoretically.

New Generation Rollingstock Depot: Case Study Report

This report summarises the findings of a case study on Queensland’s New Generation Rollingstock (NGR) Project carried out as part of SBEnrc Project 2.34 Driving Whole-of-life Efficiencies through BIM and Procurement. This case study is one of three exemplar projects studied in order to leverage academic research in defining indicators for measuring tangible and intangible benefits of Building Information Modelling (BIM) across a project’s life-cycle in infrastructure and buildings. The NGR is an AUD 4.4 billion project carried out under an Availability Payment Public-Private Partnership (PPP) between the Queensland Government and the Bomabardier-led QTECTIC consortium comprising Bombardier Transportation, John Laing, ITOCHU Corporation and Aberdeen Infrastructure Investments. BIM has been deployed on the project from conceptual stages to drive both design and the currently ongoing construction at the Wulkuraka Project Site. This case study sourced information from a series of semi-structured interviews covering a cross-section of key stakeholders on the project. The present research identified 25 benefits gained from implementing BIM processes and tools. Some of the most prominent benefits were those leading to improved outcomes and higher customer satisfaction such as improved communications, data and information management, and coordination. There were also a number of expected benefits for future phases such as: • Improved decision making through the use of BIM for managing assets • Improved models through BIM maturity • Better utilisation of BIM for procurement on similar future projects • New capacity to specify the content of BIM models within contracts There were also three benefits that were expected to have been achieved but were not realised on the NGR project. These were higher construction information quality levels, better alignment in design teams as well as project teams, and capability improvements in measuring the impact of BIM on construction safety. This report includes individual profiles describing each benefit as well as the tools and processes that enabled them. Four key BIM metrics were found to be currently in use and six more were identified as potential metrics for the future. This case study also provides insights into challenges associated with implementing BIM on a project of the size and complexity of the NGR. Procurement aspects and lessons learned for managers are also highlighted, including a list of recommendations for developing a framework to assess the benefits of BIM across the project life-cycle.