In the era of experience economy, how best to deliver memorable and exciting customer experiences has become a key issue for service providers. This research aims to build a systematical, quantitative and expectation-based mechanism to design and manage service experience and operation for cyber-physical services. Consequently, this study not only analyzes and synthesizes the critical factors by reviewing literatures (that is, customer expectation, service operation and customer emotion) within the background of service science but also establishes a conceptual theoretical framework for designing satisfactory service experiences. Furthermore, this study presents a concept of the Exquisite Technology and a service system (i.e. U2EX) with a customer expectation management engine (including five core methods, Hawk-Dove game, Coopetition, PSO, FCM and expectation measurement model) in the exhibition context to demonstrate the feasibility of implementing the notions of customer expectation management and service experience design. Besides, we integrate the expectation theory with the emotion theory to build a theoretical concept and employ a multimethod (including a single case study, interviews, simulations and questionnaire surveys) to test the relations and research propositions of the theoretical concept. The research results show positive evidences to support our developed theoretical concept. The customer expectation measurement model is one critical element of the proposed engine that can help service providers understand and quantify customer expectation in dynamic and real time environments for appropriate service experiences based on the systematical and theoretical groundings (i.e. Fechner’s law and operation risk). Hence, we use the simulations to verify the reliability of the customer expectation measurement model. Meanwhile, this research also conducts simulation experiments of Hawk-Dove game, PSO, FCM and Coopetition methods to have preliminary evidences for supporting the proposed mechanism. Thus, service providers provide customers with high-quality service experiences to achieve customer satisfaction and co-create values with customers through meticulous service experiences design approaches. The proposed mechanism of expectation-based service experience and operation design and management has been demonstrated in the exhibition service sector. We would like to apply the advantage and usage of the proposed mechanism to the other feasible domains and service sectors. Consequently, this study proposes a S-D based input-output analysis approach in order to find the potential fields that can also adopt the proposed mechanism by measuring the effects of technology spillovers.