The Impact of Customer Information on Service Supply and Demand: Evidence from a Large Live-Streaming Experiment

Abstract

<p><strong><em>Problem definition</em>:</strong> As digitization transforms the service sector and empowers service platforms, questions arise about utilizing and disseminating customer information captured by digitization to enhance platform operations. We contribute by investigating how providing customer-related information at the start of a service encounter impacts both service supply and demand in the context of entertainment service platforms. <strong><em>Methodology/results</em>:</strong> We conducted a field experiment on a live-streaming platform that connects hundreds of millions of viewers with individual broadcasters. For broadcasters randomly assigned to the treatment condition (but not for broadcasters in the control condition), when a viewer entered their shows, information about the viewer appeared on the screen. Our analyses, involving a random sample of 49,998 broadcasters, demonstrate that relative to control broadcasters, treatment broadcasters expanded service supply by 12.62% by increasing both show frequency (3.31%) and show length (7.10%), thus earning 10.44% more income, based on our conservative estimate. Moreover, our intervention increased service demand (measured by viewer watch time) by 4.51%. Additional analyses and surveys in our field setting and online experiments (<em>n</em> = 3,115) shed light on the potential mechanisms. Viewer-related information enables broadcasters to offer personalized service and vividly perceive viewers. On the demand side, viewers appreciate personalized service and interact with broadcasters more, which collectively boost demand. On the supply side, broadcasters not only enjoy the increased interaction with viewers but also feel a stronger sense of appreciation due to the more vivid mental image of viewers, which collectively lifts service supply. <strong><em>Managerial implications</em>:</strong> This research suggests that providing customer-related information at the beginning of a service encounter can increase both service demand and supply. This low-cost, information-based intervention has important implications for digital service platforms that have little control over service providers’ work schedules and service quality.<br></p>