Research Summary

Customer Heterogeneity

by Ryan W. Buell


In the first empirical investigation of the relationship between customer heterogeneity and the quality of outcomes that a service operating system can deliver, Professor Buell, together with Professors Campbell and Frei, has found evidence suggesting that differences among customers can account for more than 90 percent of the explainable variance in transaction satisfaction with a given operating system. Subsequent analyses reveal that the degree of compatibility between the customer and a firm’s operating system explains part of this difference. Further, a cross-firm analysis demonstrates that heterogeneity among customers drives down service satisfaction ratings.