Design to learn: customizing services when the future matters

Internet-based customization tools can be used to design service encounters that maximize customers' utility in the present or explore their tastes to provide more value in the future, where these two goals conflict with each other. Maximizing expected customer satisfaction in the present leads to slow rates of learning that may limit the ability to provide quality in the future. An emphasis on learning can lead to unsatisfied customers that will not only forego purchasing in the current period, but, more seriously, never return if they lose trust in the service provider's ability to meet thei...