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Service Supply Chain - Service Management

In: Business and Management

Submitted By didiseror
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The service profit chain

This case study sets out a simple and well-defined way to build profitability and growth in a service business. It’s focusing on how satisfied our customers must be in order to become profitable and to keep those customers, companies must manage all the aspect of the operation that affects customer satisfaction, which is determined by the service-profit chain as it helps managers target new investments to develop service and satisfaction levels to gain competitive advantage. As a result, companies that perform well on the service-profit chain aspect are probably doing well.
The service profit chain starts with the internal service quality (selection, development, training), which is based on engagement and ownership (trust). Moreover, by engaging employees, you make them happy; as they will feel a part of the company they will be more productive, meaning the company gets ownership out of it, which turns in a high level of satisfaction and loyalty. Basically it emphasizes that that every part of the chain is very important, meaning if employees are satisfied but not productive, then it will not lead to value, which will not lead to satisfaction (we must take care of the value of the service as it based on perceptions of the way a service is delivered on customer expectations, the result they get out of the product or service) and so on etc. Second, it discusses a direct relationship within the chain, meaning that each level leads to the next level. By following this process, a company can create a customer engagement and ownership; resulting with customer loyalty, that increases growth and profitability of the company.
As it said in the article: “5% increase in customer loyalty can produce profit increases from 25%-85%.” That’s why it’s about the quality of the market and not quantity. As I said before, the case emphasizes the importance of...

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