Implementation and effectiveness of strategic actions used to reduce customer variability

Customer variability is a problem for service providers because it can have a significant adverse affect on service quality, and hence on customer loyalty. Drawing on the work of Frei [Breaking the trade-off between efficiency and service. Harvard Business Review , 84 (11), 92--101 (2006)] and Fitzsimmons and Fitzsimmons [ Service management: Operations, strategy, and information technology (6th ed.). New York, NY: McGraw-Hill (2008)], the present study: (i) systematically categorises six types of customer variability (‘arrival variability’, ‘request variability’, ‘capability variability’, ‘effort variability’, ‘variability in subjective preference’, and ‘communication variability’); (ii) posits these in terms of the well-known service quality ‘gap’ model; and (iii) organises the strategic actions that can be adopted to reduce the effects of the six kinds of customer variability into four categories (‘classic accommodation’ (CA), ‘classic reduction’, ‘low-cost accommodation’, and ‘uncompromised reduction’). The study then undertakes an empirical investigation of the implementation and effectiveness of these various strategic actions in a sample of Taiwanese service providers in a variety of industries. In general, the study finds that the respondents favour the use of ‘CA’ actions to overcome customer variability and that they demonstrate a relative neglect of potentially effective actions belonging to the other three categories. The study concludes that service firms need to pay more attention to neglected actions that have significant potential to overcome customer variability and improve service quality.