Based on cost of quality (CoQ) research, this study aims to highlight the importance of incorporating the costs to customers in contributing to service quality when examining how customers respond to possible service failures [quality assurance behavior (QAB)]. Consequently, this study also aims to show how the CoQ framework can be a useful tool to the service industry in determining enhancements in quality and related expenditures.
Using the airline industry as a case example, this study empirically tests the impact of predicted service quality and its associated costs on an individual’s QAB (wait time spent at the departing airport) through revealed preferences. The study uses survey data from more than 4,000 passengers matched with travel-specific quality information archived by the US Department of Transportation (DOT).
This study finds that customers are willing to increase their level of QAB when informed of an increased probability of service failure. This study also finds that the level of QAB varies depending on anticipated customer costs of avoiding or responding to service failures.
Findings of this study emphasize the need for shared responsibility between service providers and their customers in making decisions on the provision of service quality, as helping customers adjust the appropriate level of QAB may result in greater efficiency and higher quality of service.
This study conceptualizes and empirically tests causal relationships between expected quality and customer efforts (QAB), thus contributing to operations literature examining CoQ in a service setting. This study argues that it is critical to consider shared responsibilities between co-producers (service providers and customers) in service operations studies.
