Service Profit Chain: A Strategy for Service Firm

Services are different from those of tangible goods on the basis of nature and certain characteristics. That is why service firm tend to have a bit different strategic focus than those of firms involved in business of tangible goods. Service firms are more prone to immediate customer feedback, therefore requires expertise in providing the right service experiences. Therefore, the strategies to keep their marketing efforts and service provision going right, are needed to be including all aspects that could effect the service quality in any way. "Service Profit chain" is a strategy used by service providing firms  in order to provide value to customers and receive value in return.
Service profit chain is a step-wise process that helps companies yield what is beneficial for both organization and customers. Its like a chain reaction, if the preceding step accomplished successively the next step would automatically go right. According to Kotler (2011), The first step this chain is "Internal Customer Service" which emphasizes on serving the inside customers right and internal customers of the company are its employees. Employees are the main asset of the company, and they are the ones involved in creation and provision of service. So first priority is to care for them so they may care for the company in return. When they are served right, they become satisfied and motivated to do their jobs efficiently and effectively which makes them productive employees. Here come the next step in the chain that is "Employee Productivity". If the first step is done right, it would automatically lead to increased employee productivity. Productive employees would ultimately be successful in providing right services to the customers and creating greater customer value. "Greater Customer Value" is the outcome of employee productivity. When customers receive the benefits that matches their expectations and fulfill their needs and wants, they feel satisfied and become loyal customers to the company. So "Satisfaction and Customer Loyalty" is achieved when they are provided with greater value. This attitude and behaviour of consumer helps companies earning greater values in terms of profit. Therefore, "Greater Profits" are the outcome of customer satisfaction and customer loyalty.

Following this service-profit chain companies can keep their customers happy and make their interaction with customers successful. Because customer-service provider interaction is the situation which can make or break customers. So companies should initiate their focus from effectiveness of service provider who deals with customers directly or indirectly in order to earn greater revenues.


Unknown said...

Hello admin how are you doing?
I read your post and I like it very much. I also like the theme of your blog which is simple and the navigation bar is also good.
Thanks for these posts

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