Operational Consequences of Customer Interaction Design: Evidence From Last-Mile Delivery Services

Problem definition: Communication and customer interaction design have been used as elements to improve customer satisfaction and future purchasing behavior, but little is known about how they can be used as levers to improve operational performance.

Methodology/results: We partner with a last-mile delivery company and, using natural and field experiments, explore the effects that communication channels and customer interfaces have on a key metric of the process: failed deliveries. We show that communication can be used as a lever to improve operational performance -- when no communication is possible, failed deliveries increase. We find that using more salient communication channels (instant messages versus emails) increases the reach of the information. However, against expectations, we find that it increases the likelihood of failed deliveries. Using natural language analysis, we explore the mechanism behind this result and find that the use of instant messages increases the tendency of customers to try to coordinate delivery times and locations. Finally, we explore the value of making the information available to customers via self-service, pull channels. Our results suggest that these channels can be used to identify customers that are harder to serve.

Managerial implications: Our work shows the relevance of communication channels as drivers of operational performance. We provide evidence that these channels can be used to manage customers’ expectations and improve operational performance. We also show the importance of alignment between the communication channel and the operational process. Deciding the type of channel is key to shaping customers' behavior and expectations. Understanding and supporting channel norms is essential to achieve such alignment.