Focusing on the employee-customer relationship can transform organizations into low-cost providers while achieving outstanding results. The authors, backed by thirty-one years of research, argue that employee satisfaction, loyalty, and commitment directly impact customer satisfaction and, consequently, the organization's profitability and growth. This concept, termed the value profit chain, challenges previous beliefs and emphasizes the importance of nurturing employee relationships to drive business success.
In this pathbreaking work, renowned Harvard Business School experts reveal how leading companies excel by managing the service profit chain. The book addresses why select service firms consistently outperform competitors, a question often overlooked in anecdotal "service excellence" literature. Drawing on five years of research, the authors analyze how firms like American Express, Southwest Airlines, and Ritz-Carlton link profit and growth to customer and employee loyalty, satisfaction, and productivity. Key relationships identified include profit and customer loyalty, employee loyalty and customer loyalty, and employee satisfaction and customer satisfaction, all of which are mutually reinforcing.
The authors provide a strategic service vision model that managers can use to enhance operations and marketing. For instance, Banc One's approach to measuring customer loyalty through service depth directly influenced profitability, while Taco Bell's top-rated stores outperformed others across all metrics. They illustrate how to manage the customer-employee satisfaction mirror and the customer value equation to achieve a "customer's eye view" of services. Companies can measure service profit chain relationships, communicate self-appraisals, develop performance scorecards, and improve overall service profit chain performance. The impact is significant; from 1986 to 1995, the stock prices of the studied firms rose 147%, nearly double
