Note---A Mathematical Model for Evaluating Cross-Sales Policies in Telephone Service Centers
Manufacturing & Service Operations Management
Cross-Selling in a Call Center with a Heterogeneous Customer Population
Operations Research
Incentives for Quality Through Endogenous Routing
Manufacturing & Service Operations Management
Priority Assignment Under Imperfect Information on Customer Type Identities
Manufacturing & Service Operations Management
When Promotions Meet Operations: Cross-Selling and Its Effect on Call Center Performance
Manufacturing & Service Operations Management
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This paper studies service-delivery design in settings where firms engage in value-creation activities that have the objective of generating additional revenue from customer interactions. The paper provides a general modelling framework to analyze the ties between market segmentation decisions, incentives, and process performance in such service-delivery systems. The firm is modelled as a single-server queue, in a principal-agent framework. Customers have different value-generation potentials whose realizations are observed by the server but not by the manager of the firm. The manager determines a market segmentation scheme given an overall customer value-generation profile, which divides customers into two groups (high and low), and also determines a service level for each segment. The server decides which of the two available service levels (high and low) to provide for each customer, given a compensation scheme offered by the manager. The optimal market segmentation decision, optimal service-level choice, and a set of optimal linear incentive contracts that enable their implementation are characterized. The robustness of these strategies is explored with respect to model parameters and assumptions. It is shown that a market segmentation scheme that combines revenue generation concerns with their process implications is essential for success. Characteristics of appropriate incentive schemes are identified.