Research Summary

Service Quality

by Ryan W. Buell


Firm decisions about the level of service quality to offer relative to competitors in a market may have unexpected effects on customer retention. In collaboration with HBS Professors Dennis Campbell and Frances Frei, Professor Buell has shown that firms offering high-quality service in a market may be especially vulnerable in the face of increased service competition: their most valuable, service-sensitive customers are likely to defect to higher-quality service, while their most price-sensitive customers migrate to lower-cost, lower-quality alternatives.