Service-Profit Chain

Posted by | July 31, 2008 | blog, Entrepreneurial | No Comments

Going through the HBR or the Harvard Business Review, I found some articles which were quite interesting and informative. Some of the simple rules that all of us are aware are reiterated and makes us to take a fresh look at the same, one such heading was the ‘Service-Profit chain’. The write up on ‘Optimization of Profitability Chain” is quite self explanatory. I am reproducing the same as below

1. Internal Service Quality affect employee satisfaction
2. Employee satisfaction affects employee loyalty
3. Employee loyalty affects employee productivity
4. Employee productivity affects external service value
5. External service value affects customer satisfaction
6. customer satisfaction affects customer loyalty
7. Customer loyalty affects growth and profitability.”


Quite brief and quite apparent but refreshing the most basic of principles is quite essential.

Source:-Best of HBR By James L. Heskett, Thomas O.Jones, Gary W. Loveman, W. Earl Sasser, JR., and Leonard A. Schlesinger

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