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Frances X. Frei

UPS Foundation Professor of Service Management

Contact (617) 495-7968
Overview Biography Publications & Course Materials Current Research Areas of Interest

Published Papers

Buell, Ryan W., Dennis Campbell, and Frances X. Frei. "Are Self-Service Customers Satisfied or Stuck?" Production and Operations Management (forthcoming). Abstract

This paper investigates the impact of self-service technology (SST) usage on customer satisfaction and retention. Specifically, we focus on disentangling the distinct effects of satisfaction and switching costs as drivers of retention among self-service customers. Our empirical analysis examines 26,924 multi-channel customers of a nationwide retail bank. For each customer, we track channel usage, overall satisfaction, and actual retention over a one-year period. We find that relative to face-to-face service, customers who use self-service channels for a greater proportion of their overall transactions, are either no more satisfied or less satisfied with the service they receive, depending on the channel. However, we also find that these same customers are predictably less likely to defect to a competitor if they are heavily reliant on self-service channels characterized by high switching costs. We demonstrate that when self-service usage promotes retention, it does so in a way that is consistent with switching costs rather than via increased satisfaction. As a robustness check, we examine the behavior of channel enthusiasts, who concentrate transactions among specific channels. Relative to more diversified customers, we find that self-service enthusiasts in low switching cost channels defect with greater frequency, while self-service enthusiasts in high switching cost channels are retained with greater frequency. Managerial implications of these findings are discussed, as well as opportunities for future research.
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Campbell, Dennis, and Frances X. Frei. "Market Heterogeneity and Local Capacity Decisions in Services." Manufacturing and Service Operations Management (revised and resubmitted).

Campbell, Dennis, and Frances X. Frei. "The Cost Structure, Customer Profitability, and Retention Implications of Self-Service Distribution Channels: Evidence from Customer Behavior in an Online Banking Channel." Management Science (forthcoming). Abstract

This paper uses the context of online banking to investigate the consequences of employing self-service distribution channels to alter customer interactions with the firm. Using a sample of retail banking customers observed over a 30-month period at a large U.S. bank, we test whether changes in service consumption, cost-to-serve, and customer profitability are associated with the adoption of online banking. We find that customer adoption of online banking is associated with (1) substitution primarily from incrementally more costly self-service delivery channels (ATM and voice response unit); (2) augmentation of service consumption in more costly service delivery channels (branch and call center); (3) a substantial increase in total transaction volume; (4) an increase in estimated average cost-to-serve resulting from the combination of (1) through (3); and (5) a reduction in short-term customer profitability. However, we find that use of the online banking channel is associated with higher customer retention rates over one-, two-, and three-year horizons. The documented relationship between the use of online banking and customer retention remains positive even after controlling for self-selection into the online channel. We also find evidence that future market shares for our sample firm are systematically higher in markets with high contemporaneous utilization rates for the online banking channel. This finding holds even after controlling for contemporaneous market share suggesting it is not simply the result of increased market power leading to the acquisition of online banking customers.
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Frei, Frances X. "The Four Things a Service Business Must Get Right." Harvard Business Review 86, no. 4 (April 2008).

Frei, Frances X. "Breaking the Trade-Off Between Efficiency and Service." Harvard Business Review 84, no. 11 (November 2006): 92-101.

Campbell, Dennis, and Frances X. Frei. "The Persistence of Customer Profitability: Empirical Evidence and Implications from a Financial Services Firm." Journal of Service Research 7, no. 2 (November 2004).

Frei, Frances X. "Beyond the Carrot and the Stick: New Alternatives for Influencing Customer Behavior." Harvard Management Update, March 2003.

Hitt, L., and F. Frei. "Do Better Customers Utilize Electronic Distribution Channels? The Case of PC Banking." Management Science 48, no. 6 (June 2002): 732-748.

Frei, Frances X., and Y. Moon. "Web Self-Service Can Be Self-Defeating." American Banker (May 26, 2000).

Moon, Y., and F. Frei. "Exploding the Self-Service Myth." Harvard Business Review 78, no. 3 (May-June 2000): 26-27.

Frei, F., R. Kalakota, A. Leone, and L. Marx. "Process Variation as a Determinant of Bank Performance: Evidence from the Retail Banking Study." Management Science 45, no. 9 (September 1999): 1210-1220.

Frei, F., and P. Harker. "Measuring the Efficiency of Service Delivery Processes: With Application to Retail Banking." Journal of Service Research 1, no. 4 (August 1999): 300-312.

Frei, Frances X., and Patrick T. Harker. "Measuring Aggregate Process Performance Using AHP." European Journal of Operational Research 116, no. 2 (16 July 1999): 436-442.

Frei, F., and P. Harker. "Projections onto Efficient Frontiers: Theoretical and Computational Extensions to DEA." Journal of Productivity Analysis 11, no. 3 (June 1999): 275-300.

Metters, R., F. Frei, and V. Vargas. "Measurement of Multiple Sites in Service Firms with Data Envelopment Analysis." Production and Operations Management Journal 8, no. 3 (1999): 264-281.

Book Chapters

Campbell, Dennis and Frances X. Frei. "Cost Structure Patterns in the Asset Management Industry." Chap. 8 in Operational Control in Asset Management: Processes and Costs. 1st ed. Edited by Michael Pinedo, 154-168. Denmark: SimCorp StrategyLab, forthcoming. Abstract

This chapter examines patterns in the cost structure of asset management firms and establishes two important trends in cost behavior. First, when revenues are growing, "indirect" costs related to sales, distribution, marketing, personnel, technology, and occupancy are far from fixed in this industry. In some cases they are "supervariable" or rising at a faster rate than sales. Second, and in contrast, such indirect costs appear relatively fixed in the face of sales declines in this industry. We discuss potential sources of these cost-structure patterns and their implications for cost management efforts as asset management firms move forward from the financial crisis of 2008.
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Frei, Frances X., and Patrick T. Harker. "Value Creation and Process Management: Evidence from Retail Banking." In Creating Value in Financial Services, edited by E. Melnick, P. Nayyar, M. Pinedo and S. Seshadri. Kluwer Academic Publishers, 2000.

Frei, F., P. Harker, and L. Hunter. "Inside the Black Box: What Makes a Bank Efficient." In Financial Institutions: Efficiency, Innovation, Regulation, edited by P. Harker and S. Zenios. Cambridge: Cambridge University Press, 2000.

Hitt, Lorin M., Frances X. Frei, and Patrick T. Harker. "How Financial Firms Decide on Technology." In Brookings Wharton Papers on Financial Services, 1999, edited by Robert E. Litan and Anthony M. Santomero, 93-146. Washington, D.C.: Brookings Institution, 1999.

Frei, F., P. Harker, and L. Hunter. "Retail Banking." In U.S. Industry in 2000: Studies in Competitive Performance, edited by David Mowrey. Washington, D.C.: National Academy Press, 1999.

Kalakota, R., and F. Frei. "Frontiers of Online Financial Services." Chap. 2 in Banking and Finance on the Internet., 19-74, edited by M. Cronin. New York: Van Nostrand Reinhold Press, 1997.

Other Papers

Campbell, Dennis, and Frances Frei. "Market Heterogeneity and Local Capacity Decisions in Services."

Teaching and Training Materials

Frei, Frances X. Capitalizing on the Power of the Customer. Faculty Seminar Series. Boston: Harvard Business School Publishing, 2004. Cd-rom. (Faculty Lecture: HBSP Product Number 9-824-XC.)

HBS Course Materials

Frei, Frances X., Brian Corbett, Mark Partin, and Daniel Rethazy. "Abercrombie & Kent." Harvard Business School Case 603-002.

Frei, Frances X., and Dennis Campbell. "BigEast Bank (A): Credit Card Approval." Harvard Business School Case 602-098.

Frei, Frances X. "BigEast Bank (A): Credit Card Approval (CW)." Harvard Business School Spreadsheet Supplement 608-716.

Frei, Frances X. "Capitalizing on the Power of the Customer." Harvard Business School Case Method Teaching CD 605-037.

Frei, Frances X., Corey B. Hajim, and Christian Hempell. "Celebrity Cruises, Inc.: A Taste of Luxury." Harvard Business School Case 603-096.

Frei, Frances X. "Celebrity Cruises, Inc.: A Taste of Luxury (TN)." Harvard Business School Teaching Note 606-109.

Frei, Frances X., Amy C. Edmondson, Christine van Keuren, and Eliot Sherman. "Cleveland Clinic." Harvard Business School Case 607-143.

Frei, Frances X., Amy C. Edmondson, and Christine Harris-Van Keuren. "Cleveland Clinic (TN)." Harvard Business School Teaching Note 608-124.

Frei, Frances X., Daniel Rethazy, and Hanna Rodriguez-Farrar. "Club Med (C): The "Re-New" Plan." Harvard Business School Case 602-089.

Frei, Frances X., and Corey B. Hajim. "Commerce Bank." Harvard Business School Case 603-080.

Frei, Frances X. "Commerce Bank (TN)." Harvard Business School Teaching Note 608-058.

Frei, Frances X. "Conceptualizing the Customer Operating Role." Harvard Business School Module Note, Instructor Only 606-032.

Frei, Frances X. "Creating New Services, Module Overview Note TN." Harvard Business School Teaching Note 602-178.

Frei, Frances X. "Customer-Introduced Variability in Service Operations." Harvard Business School Note 606-063.

Frei, Frances X. "Data Analysis Exercise." Harvard Business School Exercise 606-034.

Frei, Frances X., Amy C. Edmondson, and Corey B. Hajim. "Dell Computers (A): Field Service for Corporate Clients." Harvard Business School Case 603-067.

Frei, Frances X., and Christine van Keuren. "Dell Computers (B): The Transition." Harvard Business School Supplement 607-081.

Frei, Frances X. "Dell Computers: Field Service for Corporate Clients (A) and Transition (B) (TN)." Harvard Business School Teaching Note 608-046.

Frei, Frances X. "Designing Sustainable Service Models." Harvard Business School Note 606-031.

Frei, Frances X., and Hanna Rodriguez-Farrar. "eBay (A): The Customer Marketplace." Harvard Business School Case 602-071.

Frei, Frances X., and Hanna Rodriguez-Farrar. "eBay (B): Combating Fraud." Harvard Business School Case 602-152.

Frei, Frances X., and Hanna Rodriguez-Farrar. "eBay (C): PayPal Merger." Harvard Business School Case 603-042.

Frei, Frances X. "eBay: The Customer Marketplace (A) and Combating Fraud (B) (TN)." Harvard Business School Teaching Note 602-126.

Frei, Frances X., and Dennis Campbell. "Economics of Retail Banking Note." Harvard Business School Note 602-153.

Frei, Frances X., and Christine van Keuren. "Exercise: Challenging Operational Assumptions." Harvard Business School Teaching Note 608-129.

Frei, Frances X. "Exercise: Challenging Operational Assumptions." Harvard Business School Exercise 608-128.

Frei, Frances X. "Exercise: Customer-Operator Letter Writing." Harvard Business School Exercise 608-126.

Frei, Frances X. "Exercise: Customer-Operator Letter Writing (TN)." Harvard Business School Teaching Note 608-127.

Frei, Frances X., and Hanna Rodriguez-Farrar. "First Union Corporation (A): Future Bank." Harvard Business School Case 602-013.

Frei, Frances X. "First Union Corporation (A): Future Bank (TN)." Harvard Business School Teaching Note 608-049.

Frei, Frances X., and Hanna Rodriguez-Farrar. "First Union Corporation (B)." Harvard Business School Case 602-014.

Frei, Frances X., and Hanna Rodriguez-Farrar. "FleetBoston Financial: Online Banking." Harvard Business School Case 601-042.

Frei, Frances X., and Hanna Rodriguez-Farrar. "FleetBoston Financial: Online Banking TN." Harvard Business School Teaching Note 601-088.

Frei, Frances X., and Hanna Rodriguez-Farrar. "Fraud Prevention at Omni Bank." Harvard Business School Case 602-068.

Frei, Frances X., Youngme E. Moon, and Hanna Rodriguez-Farrar. "Gateway: Moving Beyond the Box." Harvard Business School Case 601-038.

Frei, Frances X. "Gateway: Moving Beyond the Box (TN)." Harvard Business School Teaching Note 608-050.

Frei, Frances X., Youngme E. Moon, and Hanna Rodriguez-Farrar. "Great Dakota Bank: Online Banking." Harvard Business School Case 603-011.

Frei, Frances X. "GuestFirst Hotel (A) and (B) (CW)." Harvard Business School Spreadsheet Supplement 608-714.

Frei, Frances X., and Dennis Campbell. "GuestFirst Hotel (A): Customer Loyalty." Harvard Business School Case 602-099.

Frei, Frances X. "GuestFirst Hotel (A): Statistics Review with Data Desk (TN)." Harvard Business School Teaching Note 606-038.

Frei, Frances X. "GuestFirst Hotel (B): Statistics Review with Data Desk (TN)." Harvard Business School Teaching Note 606-039.

Frei, Frances X., and Dennis Campbell. "GuestFirst Hotel (B): Taking Advantage of Panel Data." Harvard Business School Case 602-111.

Frei, Frances X., and Dennis Campbell. "GuestFirst Hotel (TN) (A) and (B)." Harvard Business School Teaching Note 606-062.

Frei, Frances X., and Dennis Campbell. "Improvement with Customer-Operators." Harvard Business School Module Note, Instructor Only 608-135.

Frei, Frances X., and Amy C. Edmondson. "Influencing Customer Behavior in Service Operations." Harvard Business School Note 606-061.

Frei, Frances X., and Dennis Campbell. "Informing Service Management with Customer Data." Harvard Business School Note 606-097.

Frei, Frances X., and Hanna Rodriguez-Farrar. "Innovation at Progressive (A): Pay-As-You-Go Insurance." Harvard Business School Case 602-175.

Frei, Frances X., and Hanna Rodriguez-Farrar. "Innovation at Progressive (B): Homeowners Insurance." Harvard Business School Case 601-138.

Frei, Frances X., and Hanna Rodriguez-Farrar. "Innovation at Progressive (C): Auto Repair." Harvard Business School Case 601-139.

Frei, Frances X. "Innovation at Progressive (TN) (A) & (B)." Harvard Business School Teaching Note 608-044.

Frei, Frances X., Daniel Rethazy, and Corey B. Hajim. "Intrawest Corporation." Harvard Business School Case 603-001.

Frei, Frances X. "Introduction to Data Analysis with Data Desk." Harvard Business School Note 608-154.

Frei, Frances X., and Hanna Rodriguez-Farrar. "Letter Writing Exercise." Harvard Business School Exercise 605-056.

Frei, Frances X., and Ricardo Reisen de Pinho. "Magazine Luiza: Building a Retail Model of "Courting the Poor"." Harvard Business School Case 606-048.

Frei, Frances X., and Dennis Campbell. "Managing Service Operations: The Managerial Research Design Process." Harvard Business School Teaching Note 608-155.

Frei, Frances X. "Managing Service Operations: Understanding the Customer Operating Role." Harvard Business School Course Overview, Instructor Only 606-092.

Frei, Frances X. "New Service Design Exercise." Harvard Business School Exercise 605-053.

Frei, Frances X. "New Service Design Exercise (TN)." Harvard Business School Teaching Note 608-132.

Edmondson, Amy C., Frances X. Frei, and Corey B. Hajim. "Ninth House: e-Learning Software." Harvard Business School Case 601-047.

Frei, Frances X., and Hanna Rodriguez-Farrar. "Oracle Corporation." Harvard Business School Case 601-043.

Frei, Frances X., and Hanna Rodriguez-Farrar. "Oracle Corporation TN." Harvard Business School Teaching Note 601-089.

Frei, Frances X., and Corey B. Hajim. "Orient-Express Hotels." Harvard Business School Case 603-024.

Frei, Frances X. "Orient-Express Hotels (TN)." Harvard Business School Teaching Note 608-059.

Frei, Frances X. "Pilgrim Bank (A), (B) and (C) (CW)." Harvard Business School Spreadsheet Supplement 608-715.

Frei, Frances X., and Dennis Campbell. "Pilgrim Bank (A): Customer Profitability." Harvard Business School Case 602-104.

Frei, Frances X., and Dennis Campbell. "Pilgrim Bank (A): Customer Profitability (TN)." Harvard Business School Teaching Note 608-115.

Frei, Frances X. "Pilgrim Bank (A): Statistics Review with Data Desk." Harvard Business School Teaching Note 608-095.

Frei, Frances X., and Dennis Campbell. "Pilgrim Bank (B): Customer Retention." Harvard Business School Case 602-095.

Frei, Frances X., and Dennis Campbell. "Pilgrim Bank (B): Customer Retention (TN)." Harvard Business School Teaching Note 608-116.

Frei, Frances X. "Pilgrim Bank (B): Statistics Review with Data Desk." Harvard Business School Teaching Note 608-096.

Frei, Frances X., and Dennis Campbell. "Pilgrim Bank (C): Electronic Billpay." Harvard Business School Case 602-103.

Frei, Frances X., and Dennis Campbell. "Pilgrim Bank (C): Electronic Billpay (TN)." Harvard Business School Teaching Note 608-117.

Frei, Frances X. "Pilgrim Bank (C): Statistics Review with Data Desk." Harvard Business School Teaching Note 608-097.

Frei, Frances X., and Corey B. Hajim. "Rapid Rewards at Southwest Airlines." Harvard Business School Case 602-065.

Frei, Frances X. "Rapid Rewards at Southwest Airlines (TN)." Harvard Business School Teaching Note 608-048.

Frei, Frances X. "Service Design in the Context of Customer-Operators." Harvard Business School Module Note, Instructor Only 608-134.

Frei, Frances X., and Dennis Campbell. "Simple Regression Mathematics." Harvard Business School Note 605-061.

Frei, Frances X. "Store24 (A) and (B) (CW)." Harvard Business School Spreadsheet Supplement 608-713.

Frei, Frances X., and Dennis Campbell. "Store24 (A): Managing Employee Retention." Harvard Business School Case 602-096.

Frei, Frances X. "Store24 (A): Statistics Review with Data Desk (TN)." Harvard Business School Teaching Note 606-036.

Frei, Frances X., and Dennis Campbell. "Store24 (B): Service Quality and Employee Skills." Harvard Business School Supplement 602-097.

Frei, Frances X. "Store24 (B): Statistics Review with Data Desk (TN)." Harvard Business School Teaching Note 606-037.

Frei, Frances X., and Dennis Campbell. "Store24 (TN) (A) and (B)." Harvard Business School Teaching Note 606-107.

Frei, Frances X., and Corey B. Hajim. "Tiffany & Co." Harvard Business School Case 602-110.

Frei, Frances X. "Tiffany & Co. (TN)." Harvard Business School Teaching Note 608-042.

Edmondson, Amy C., Frances X. Frei, and Corey B. Hajim. "Transformation at the IRS." Harvard Business School Case 603-010.

Frei, Frances X., and Amy C. Edmondson. "Transformation at the IRS (TN)." Harvard Business School Teaching Note 608-057.

Frei, Frances X., and Dennis Campbell. "Using Data Desk for Statistical Analysis." Harvard Business School Note 605-060.

Frei, Frances X., Amy C. Edmondson, and Corey B. Hajim. "Verizon: The Introduction of DSL." Harvard Business School Case 602-070.

Frei, Frances X., and Amy C. Edmondson. "Verizon: The Introduction of DSL (TN)." Harvard Business School Teaching Note 608-056.

Frei, Frances X., David Margalit, and Amanda Yelsh. "Vicinity Corporation: Turning Web Traffic into Store Traffic." Harvard Business School Case 602-031.

Frei, Frances X., Hanna Rodriguez-Farrar, and Corey B. Hajim. "Virgin Group, The: Filling in the Value Gap." Harvard Business School Case 602-057.

Frei, Frances X., Chekitan S. Dev, and Laure Mougeot Stroock. "Westin Hotels and Resorts: Operations of a Lifestyle Experience." Harvard Business School Case 607-129.

Frei, Frances X., Amy C. Edmondson, James Weber, and Eliot Sherman. "Yum! Brands, Inc: A Corporate Do-Over." Harvard Business School Case 606-041.

Frei, Frances X., and Amy C. Edmondson. "YUM! Brands, Inc: A Corporate Do-Over (TN)." Harvard Business School Teaching Note 606-108.

Frei, Frances X., Robin J. Ely, and Laura Winig. "Zappos.com 2009: Clothing, Customer Service and Company Culture." Harvard Business School Case 610-015.

Frei, Frances X., and Hanna Rodriguez-Farrar. "Zipcar: Influencing Customer Behavior." Harvard Business School Case 605-054.

Frei, Frances X. "Zipcar: Influencing Customer Behavior (TN)." Harvard Business School Teaching Note 608-041.