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Market-Based Solutions to Vital Economic Issues


Kenan Institute 2024 Grand Challenge: Business Resilience
Market-Based Solutions to Vital Economic Issues
Aug 16, 2021

Personalized Priority Policies in Call Centers Using Past Customer Interaction Information


To increase revenue or improve customer service, companies are increasingly personalizing their product or service offerings based on their customers’ history of interactions. In this paper, we show how call centers can improve customer service by implementing personalized priority policies. Under personalized priority policies, managers use customer contact history to predict individual-level caller abandonment and redialing behavior and prioritize them based on these predictions to improve operational performance. We provide a framework for how companies can use individual-level customer history data to capture the idiosyncratic preferences and beliefs that impact caller abandonment and redialing behavior and quantify the improvements to operational performance of these policies by applying our framework using caller history data from a real-world call center. We achieve this by formulating a structural model that uses a Bayesian learning framework to capture how callers’ past waiting times and abandonment/redialing decisions affect their current abandonment and redialing behavior and use our data to impute the callers’ underlying primitives such as their rewards for service, waiting costs, and redialing costs. These primitives allow us to simulate caller behavior under a variety of personalized priority policies and hence, collect relevant operational performance measures. We find that, relative to the first-come, first-served policy, our proposed personalized priority policies have the potential to decrease average waiting times by up to 29% or increase system throughput by reducing the percentage of service requests lost to abandonment by up to 6.3%.

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