Ryan W. Buell

Assistant Professor of Business Administration

Unit: Technology and Operations Management

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Ryan Buell is an assistant professor of business administration in the Technology and Operations Management Unit. He teaches the Technology and Operations Management course in the MBA required curriculum.

In his research, Professor Buell investigates the interactions between service businesses and their customers, and how operational choices affect customer behaviors and firm performance. His work has been published in Management Science, Production and Operations Management, and Harvard Business Review. It has been covered by such media as the Financial Post, BNET.com, WiredThe Guardian, and Forbes.com.

Professor Buell earned a DBA in Technology and Operations Management at Harvard Business School, where he received the Dean's Award and the Wyss Doctoral Research Award. He also received an MBA with high distinction in 2007 from Harvard Business School, where he was a George F. Baker Scholar, and a BBA with high distinction from the Ross School of Business at the University of Michigan, where he was elected to Phi Beta Kappa.

Prior to his graduate studies, Professor Buell co-founded and managed the Tour Now Network, an online virtual real estate tour service. He has also worked at McKinsey & Company and General Motors.

Featured Work

  1. The Labor Illusion: How Operational Transparency Increases Perceived Value

    A ubiquitous feature of even the fastest self-service technology transactions is the wait. Conventional wisdom and operations theory suggests that the longer people wait, the less satisfied they become; we demonstrate that due to what we term the labor illusion, when websites engage in operational transparency by signaling that they are exerting effort, people can actually prefer websites with longer waits to those that return instantaneous results—even when those results are identical.
  2. Think Customers Hate Waiting? Not So Fast...

    Managers typically look for ways to reduce wait time to increase customer satisfaction. New research suggests there's a better approach: showing customers a representation of the effort, whether literal or not, being expended on their behalf while they wait. (The prototypical example is the travel website Kayak, which shows customers each airline it searches.) Studies show that customers prefer waiting when the work being done is transparent-even when the waits are longer or the results are no better than those obtained with shorter waits.
  3. Are Self-Service Customers Satisfied or Stuck?

    Numerous studies in the services literature have demonstrated that self-service customers are retained with greater frequency than their full-service counterparts. There are two competing explanations for this phenomenon. Either self-service channel usage promotes customer satisfaction and in turn, loyalty, or it imposes switching costs on customers that make it more difficult for them to defect. Our empirical analysis of multi-channel banking customers suggests the latter – that self-service customers may be retained through switching costs, not satisfaction effects. In fact, the results of our analysis suggest that self-service customers aren’t just stuck, they’re actually less satisfied.

Publications

Journal Articles

  1. 'Last-place Aversion': Evidence and Redistributive Implications

    We present evidence from laboratory experiments showing that individuals are "last-place averse." Participants choose gambles with the potential to move them out of last place that they reject when randomly placed in other parts of the distribution. In modified-dictator games, participants randomly placed in second-to-last place are the most likely to give money to the person one rank above them instead of the person one rank below. Last-place aversion suggests that low-income individuals might oppose redistribution because it could differentially help the group just beneath them. Using survey data, we show that individuals making just above the minimum wage are the most likely to oppose its increase. Similarly, in the General Social Survey, those above poverty but below median income support redistribution significantly less than their background characteristics would predict.

    Keywords: Income Characteristics; Rank and Position; Attitudes;

    Citation:

    Kuziemko, Ilyana, Ryan W. Buell, Taly Reich, and Michael Norton. "'Last-place Aversion': Evidence and Redistributive Implications." Quarterly Journal of Economics 129, no. 1 (February 2014): 105–149.
  2. The Labor Illusion: How Operational Transparency Increases Perceived Value

    A ubiquitous feature of even the fastest self-service technology transactions is the wait. Conventional wisdom and operations theory suggests that the longer people wait, the less satisfied they become; we demonstrate that due to what we term the labor illusion, when websites engage in operational transparency by signaling that they are exerting effort, people can actually prefer websites with longer waits to those that return instantaneous results—even when those results are identical. In five experiments that simulate service experiences in the domains of online travel and online dating, we demonstrate the impact of the labor illusion on service value perceptions, demonstrate that perceptions of service provider effort induce feelings of reciprocity that together mediate the link between operational transparency and increased valuation, and explore boundary conditions and alternative explanations.

    Keywords: Online Technology; Perception; Valuation; Service Delivery; Consumer Behavior; Performance Effectiveness; Customer Satisfaction; Service Industry;

    Citation:

    Buell, Ryan W., and Michael I. Norton. "The Labor Illusion: How Operational Transparency Increases Perceived Value." Management Science 57, no. 9 (September 2011): 1564–1579.
  3. Think Customers Hate Waiting? Not So Fast...

    Managers typically look for ways to reduce wait time to increase customer satisfaction. New research suggests there's a better approach: showing customers a representation of the effort, whether literal or not, being expended on their behalf while they wait. (The prototypical example is the travel website Kayak, which shows customers each airline it searches.) Studies show that customers prefer waiting when the work being done is transparent-even when the waits are longer or the results are no better than those obtained with shorter waits.

    Keywords: Customer Relationship Management; Service Delivery; Consumer Behavior; Performance Effectiveness; Customer Satisfaction;

    Citation:

    Buell, Ryan W., and Michael I. Norton. "Think Customers Hate Waiting? Not So Fast..." Harvard Business Review 89, no. 5 (May 2011).
  4. Are Self-service Customers Satisfied or Stuck?

    This paper investigates the impact of self-service technology (SST) usage on customer satisfaction and retention. Specifically, we disentangle the distinct effects of satisfaction and switching costs as drivers of retention among self-service customers. Our empirical analysis examines 26,924 multi-channel customers of a nationwide retail bank. We track each customer's channel usage, overall satisfaction, and retention over a 1-year period. We find that, relative to face-to-face service, customers who use self-service channels for a greater proportion of their transactions are either no more satisfied, or less satisfied with the service they receive, depending on the channel. However, we also find that these same customers are predictably less likely to defect to a competitor if they are heavily reliant on self-service channels characterized by high switching costs. Through a mediation model, we demonstrate that, when self-service usage promotes retention, it does so in a way that is consistent with switching costs. As a robustness check, we examine the behavior of channel enthusiasts, who concentrate transactions among specific channels. Relative to more diversified customers, we find that self-service enthusiasts in low switching cost channels defect with greater frequency, while self-service enthusiasts in high switching cost channels are retained with greater frequency.

    Keywords: Service Delivery; Technology; Customer Satisfaction; Competition; Cost; Banks and Banking; Behavior; Market Transactions; Management Analysis, Tools, and Techniques;

    Citation:

    Buell, Ryan W., Dennis Campbell, and Frances X. Frei. "Are Self-service Customers Satisfied or Stuck?" November/December Production and Operations Management 19, no. 6 (2010). (Awarded the Decision Sciences Institute Stan Hardy Award for Outstanding Paper Published during 2010 in the Field of Operations Management.)

Working Papers

  1. Surfacing the Submerged State with Operational Transparency in Government Services

    As Americans' trust in government nears historic lows, frustration with government performance approaches record highs. One explanation for this trend is that citizens may be unaware of both the services provided by government and the impact of those services on their lives. In an experiment, Boston-area residents interacted with a website that visualizes both service requests submitted by the public (e.g., potholes and broken streetlamps) and efforts by the City of Boston to address them. Some participants observed a count of new, open, and recently closed service requests, while others viewed these requests visualized on an interactive map that included details and images of the work being performed. Residents who experienced this "operational transparency" in government services — seeing the work that government is doing — expressed more positive attitudes toward government and greater support for maintaining or expanding the scale of government programs. The effect of transparency on support for government programs was equivalent to a roughly 20% decline in conservatism on a political ideology scale. We further demonstrate that positive attitudes about government partially mediate the relationship between operational transparency and support for maintaining and expanding government programs. While transparency is customarily trained on elected officials as a means of ethical oversight, our research documents the benefits of increased transparency into the delivery of government services.

    Keywords: Programs; Perception; Attitudes; Performance; Corporate Governance; Government Administration; Public Administration Industry; Boston;

    Citation:

    Buell, Ryan W., and Michael I. Norton. "Surfacing the Submerged State with Operational Transparency in Government Services." Harvard Business School Working Paper, No. 14-034, November 2013.
  2. How Do Customers Respond to Increased Service Quality Competition?

    When does increased service quality competition lead to customer defection, and which customers are most likely to defect? Our empirical analysis of 82,235 customers exploits the varying competitive dynamics in 644 geographically isolated markets in which a nationwide retail bank conducted business over a five-year period. We find that customers defect at a higher rate from the incumbent following increased service quality (price) competition only when the incumbent offers high (low) quality service relative to existing competitors in a local market. We provide evidence that these results are due to a sorting effect, whereby firms trade-off service quality and price, and in turn, the incumbent attracts service (price) sensitive customers in markets where it has supplied relatively high (low) levels of service quality in the past. Furthermore, we show that it is the high quality incumbent's most profitable customers who are the most attracted by superior quality alternatives. Our results appear to have long-run implications whereby sustaining a high level of service quality is associated with the incumbent attracting and retaining more profitable customers over time.

    Keywords: Customer Relationship Management; Quality; Customer Value and Value Chain; Service Operations; Consumer Behavior; Customer Satisfaction; Price; Market Entry and Exit; Service Delivery; Competitive Strategy; Banking Industry;

    Citation:

    Buell, Ryan W., Dennis Campbell, and Frances X. Frei. "How Do Customers Respond to Increased Service Quality Competition?" Harvard Business School Working Paper, No. 11-084, February 2011. (Revised April 2013.)

    Research Summary

  1. Overview

    Professor Buell is advancing the understanding of customers by studying their relationship with service operations. He examines how operational choices intended to optimize firm profits may backfire if they diminish the quality of customer experiences or alter customer behavior in unintended ways. In his work, he uses large-scale econometric analysis and laboratory and online experimental methodologies.

    Keywords: service operations; customer satisfaction; customer retention; customer behavior; Customers; Decision Making; Design; Management; Operations; Quality; Relationships; Social Psychology; Technology; Value; Banking Industry; Service Industry; Travel Industry; Web Services Industry; Retail Industry; Food and Beverage Industry;

  2. Service Quality

    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.

  3. Operational Transparency

    Conventional wisdom and operations theory suggest that the longer people wait during a service interaction, the less satisfied they become with the provider. In collaboration with HBS Professor Michael Norton, Professor Buell has shown that when service businesses show the work they are conducting on a customer’s behalf, the customer minds waiting less and values the service more. 

  4. Service Automation

    Why do firms retain self-service customers at a higher rate than their full-service counterparts? Professor Buell, with Professors Campbell and Frei, has disentangled the two competing explanations for this phenomenon: greater customer satisfaction and higher costs of switching companies. An empirical analysis of banking customers suggests that higher switching costs, not satisfaction, drives customer retention. 

  5. Customer Heterogeneity

    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.

    Teaching

  1. Technology and Operations - MBA Required Curriculum

    This course enables students to develop the skills and concepts needed to ensure the ongoing contribution of a firm's operations to its competitive position. It helps them to understand the complex processes underlying the development and manufacture of products as well as the creation and delivery of services.

    Awards & Honors

  1. Ryan W. Buell: Winner of the 2012 Doctoral Programs Dean's Award, honoring graduating students who have made extraordinary contributions to the overall success of the doctoral programs, and to the Harvard, HBS, and broader communities.

  2. Ryan W. Buell: Winner of the 2011 Wyss Award for Excellence in Doctoral Research, awarded to Harvard Business School doctoral students who have excelled at conducting outstanding academic research.

  3. Ryan W. Buell: Won the 2011 Stan Hardy Award for Outstanding Paper published in the field of Operations Management from the Decision Sciences Institute for his paper with Dennis Campbell and Frances X. Frei, “Are Self-Service Customers Satisfied or Stuck?” (Production and Operations Management, 2010).

Service Quality Competition

HBS Working Knowledge
5/16/2011

Julia Hanna

Financial Post
6/13/2011

Mitchell Osak

CBS Money Watch
2/22/2011

Sean Silverthorne

CBSNews.com
05/02/2011

Sean Silverthorne

Operational Transparency

HBS Working Knowledge
01/13/2014

Michael Blanding

This article describes the results of an experiment in which Boston-area residents interacted with a website that visualized the service requests submitted by members of the public and the City's efforts to address those requests. Does seeing the work of government—fixing potholes, repairing streetlamps, removing graffiti, collecting garbage—lead citizens to express more positive attitudes toward government and increase their support for maintaining and expanding the scale of government programs? The study shows that providing greater operational transparency into government's efforts to address citizens' needs can improve attitudes toward government.

Wired
01/23/2013

Michael I. Norton and Ryan W. Buell

Guardian
08/12/2011

Oliver Burkeman

Science of Better (podcast)
9/2/2011

Barry List

Picture yourself staring at the screen as your brand X online search for a flight goes on and on. Now look at a travel service like Kayak that explains how the system is checking one airline and one flight after another. Where would you rather search? Would you even be willing to wait slightly longer if you felt you had a window into what was going on as you waited? In the September issue of Management Science, Ryan W. Buell and Michael I. Norton of Harvard Business School explore the tradeoffs of the way you wait on the Internet. No reason to wait – hear them explain their research in this week’s podcast.

CBS Money Watch
5/2/2011

Sean Silverthorne

CBS Money Watch
4/14/2011

Kimberly Weisul

Forbes.com
11/18/2010

Halle Tecco

Operations Room (blog)
10/14/2010

Gad Allon