To survive amid ever-increasing competition, service firms must reliably meet and exceed their customers’ expectations. With this in mind, HKUST’s Xuan Wang and colleagues explore how best to manage service systems with different types of server and priority customers. Their results will help service providers serve customers more efficiently and increase their overall satisfaction.
“One typical strategy used is to categorize customers into different classes (membership levels),” the researchers explain. For example, the accounts offered to HSBC customers range from Standard to Premier, and Delta Air Lines classifies frequent fliers as Diamond, Platinum, Gold, or Silver.
“A common advantage along with an elite status is priority in waiting lines,” the authors note.
For example, airlines typically offer VIP-exclusive check-in counters for elite passengers, allowing them to bypass regular lines and enjoy faster service. However, during peak times, if the VIP queue is long or slowed down by a single complex case, joining this line may not be advantageous. In banks, however, VIPs usually don’t have exclusive counters but receive special priority numbers (e.g., V1, V2) to join a virtual VIP queue. When any teller becomes available, they first serve the next VIP in line before attending to regular customers. This priority system ensures VIPs hold the front positions in the queue, guaranteeing them shorter waiting times even without exclusive service counters.
“Does a bank’s VIP-exclusive-queue configuration dominate an airport’s VIP-exclusive-counter configuration for waiting time reduction?” ask the authors. “Is there any circumstance where the later one outperforms?” These are important questions for service firms, on which Wang and colleagues’ research sheds important new light.
The researchers analyze server assignment policies for two important systems: “one consisting of multiple homogeneous servers and two classes of customers and the other consisting of two heterogeneous servers and multiple classes of customers.” Interestingly, they show that it can be optimal to strategically keep servers idle even when there are non-priority customers in queue.
Based on their results, they propose a threshold-type heuristic policy for assigning servers in general service systems that can significantly reduce waiting times and costs.
“The clear performance advantage observed from extensive numerical experiments demonstrates the importance and usefulness of dynamic server assignment control for systems serving multiple classes of customers,” they report. Such a policy will benefit not only service firms but also their customers, especially those with VIP status.