Putting the Service Profit Chain to Work

Putting the Service Profit Chain to Work

By James L. Heskett, Thomas O. Jones, Gary W. Loveman, W. Earl Sasser, Jr., and Leonard A. Schlesinger

Issues:

The two main issues in the paper revolve on service profit chain and if there is a direct link from one factor to another. The authors defined service profit chain as the management of all the phases of operations that have an effect on customer satisfaction. Creating relationships between profitability, customer satisfaction, loyalty and employee satisfaction, loyalty and productivity is the framework of service profit chain.

It is also stressed out the importance of leaders who understands and includes the integrative framework of service profit chain in the organization’s culture; and the ability of employees to meet customers needs which is directly proportional to employee and customer satisfaction.

Analysis:

Service profit chain suggests that service has a direct link to the organization’s profitability and growth. Everything has to be centered with the people who are involved in the service. This starts from the internal environment of the organization, meaning with the management and the employees. This includes motivational strategies (technology, training, recognition, etc.), style of leadership, compensation, good working environment, etc. which drives productivity and loyalty of employees. These investments in service operations form deeply rooted values that affect customer behaviors. Because value is relative and varies from one individual to another the management should give more opportunity to frontline employees in order to give extraordinary service to individual needs that is related to the measure of quality, which equals customer satisfaction.

When customers get what they want or the service exceeded their expectation, they will become loyal customers or as Scott D. Cook, CEO of Xerox called “apostles” who will most likely have repeat purchases, positive word of mouth and...