Predicting customer choice in services using discrete choice analysis

Abstract

This paper presents an overview of the science and art of discrete choice modeling for service sector applications. With the ongoing momentum of service science, management, and engineering, the discrete choice modeling approach provides a sophisticated tool kit for assessing the needs and preferences of service customers. We provide directions for designing and executing discrete choice studies for services and discuss several examples for a number of industries including health care, financial services, retail, hospitality, and online services. We conclude with a discussion of the many managerial implications of the discrete choice approach.