The Effect of Perceived Control on Consumer Responses to Service Encounter Pace: A Revenue Management Perspective

The ability to manage the time involved in a service process is critical to effective revenue management (RM). At the same time, customer satisfaction is also a key element of time management in services. In this study, we explore the time component of RM in services that sell time implicitly by examining a dining experience. Although service managers can use pace to manage the duration of a service encounter and increase capacity during periods of high demand, manipulating the pace may interfere with customer satisfaction. Prior research has shown that the relationship of perceived pace with customer satisfaction follows an inverted U-shape. If the service pace misses the "sweet spot" that balances pacing with customer satisfaction, the revenue benefits of increasing pace may be short-lived. Using a survey-based approach, we examine the moderating effect of restaurant customers' perceived control of pace on the relationship between perceived pace and customer satisfaction. We found that when perceived control is low, perceived pace has a significant negative effect on customer satisfaction. However, when perceived control is high, consumers are less sensitive to variations in pace. This finding suggests that consumers' perceived control of pace is instrumental to attenuating the negative effect of a fast pace on customer satisfaction.