Oftentimes in the operations management literature, customers are treated like robots
All those people in the TV commercials announcing that they would celebrate by going to Disney World might have shorter waiting lines for the rides if the folks at Disney have paid attention to research by Ali Parlaktürk.
Parlaktürk is an assistant professor of operations, technology and innovation management at the University of North Carolina’s Kenan-Flagler Business School.
He studies the interactions between firms and their customers, how businesses can dictate customer behavior and how decisions businesses make can inadvertently train customers to behave in ways that are counterproductive to the business.
“Oftentimes in the operations management literature, customers are treated like robots – you set a price, and they buy it,” Parlaktürk said. “We don’t really think too much about choices customers can make to use to their advantage.”
Parlaktürk has studied the impact of customers’ self-interested routing in a service network. Customers should make decisions based on what’s best for them. How can a business that operates as a service network use that to increase customer satisfaction and ultimately increase the customers in its network? Parlaktürk used the attractions at Disney as an example.
Without any intervention from Disney service managers, the lines for the most popular attractions will be the longest. But long lines make customers grumpy and color their feelings toward the business.
Parlaktürk used analytical mathematical equations and computer simulations to show how businesses could apply priority rules to achieve a more uniform distribution of customers across attractions. For example, Disney could give a priority service pass for the most popular attraction to customers who had first visited two of the less popular rides. Disney could change the incentivized routing sequence at different times during the day, depending on the flow of customer volume and the length of the ride, to reduce the line buildup at various attractions.
“My research shows that priority rules are an important lever,” Parlaktürk said. “The firm dictates a policy; the customer responds.”
Parlaktürk’s latest research analyzes the value of having a variety of products when selling to strategic customers, those buyers who decide not only whether or which model to buy but also when to buy to best suit their goals. Some researchers have studied how firms inadvertently train their customers to wait to buy once the price has been marked down. Other researchers have looked at how offering lower-priced models cannibalizes the demand for higher-end products.
[This article has been reproduced with permission from research from the UNC Kenan-Flagler Business School: http://www.kenan-flagler.unc.edu/]