7.1 Demonstrate an understanding of the service profit chain
framework
Service profit chain framework
Demonstrates the chain of relationships among 1) employee
satisfaction, retention and productivity, 2) service value, 3)
customer satisfaction and loyalty, 4) revenue growth and
profitability
Links in the service profit chain:
Customer retention/loyalty drives profitability and growth
Customer satisfaction drives customer retention
Value drives customer satisfaction
Service quality and productivity drive value
Employee satisfaction and loyalty drives service quality and
productivity
Employee satisfaction drives employee loyalty (retention)
Internal service climate, leadership and satisfaction drives
employee behaviour
Top management leadership underlies the chain's success
7.2 Explain why the frontline is crucial to the success of a service firm
, Service personnel as a source of customer value, loyalty and
competitive advantage:
From customer's perspective - encounter with service staff is
often the most important aspect of a service
From firm's perspective - service staff can be an important source
of differentiation as well as competitive advantage
Frontline:
Key part of the product (service)
Is the service firm
Is the brand e.g. Singapore Airlines (SIA)
Frontline employees are important:
Core part of the service product - employees are the most visible
element -> deliver service + affect service quality
Is the service firm in the eyes of the customer
Is the brand - it is the employees who determine whether the
brand promise is delivered
Affect sales - Sell, cross-sell and up-sell
Key driver of customer loyalty - anticipating customer needs and
customising the service delivery, and building personalised
relationships
Determine productivity
Boundary spanners:
Service personnel who directly interface with customers
Tend to experience significant stress except for genuine feelings of
friendliness towards customers
Satisfaction sabotage:
May occur when employee morale is so low that frontline staff
members become hostile to customers or fellow employees
7.3 Explain why the work of frontline service employees is so
demanding, challenging and often difficult
Frontline work is difficult and stressful:
Boundary Spanning
Links the inside of an organisation to the outside world, operating
at the boundary of the company
framework
Service profit chain framework
Demonstrates the chain of relationships among 1) employee
satisfaction, retention and productivity, 2) service value, 3)
customer satisfaction and loyalty, 4) revenue growth and
profitability
Links in the service profit chain:
Customer retention/loyalty drives profitability and growth
Customer satisfaction drives customer retention
Value drives customer satisfaction
Service quality and productivity drive value
Employee satisfaction and loyalty drives service quality and
productivity
Employee satisfaction drives employee loyalty (retention)
Internal service climate, leadership and satisfaction drives
employee behaviour
Top management leadership underlies the chain's success
7.2 Explain why the frontline is crucial to the success of a service firm
, Service personnel as a source of customer value, loyalty and
competitive advantage:
From customer's perspective - encounter with service staff is
often the most important aspect of a service
From firm's perspective - service staff can be an important source
of differentiation as well as competitive advantage
Frontline:
Key part of the product (service)
Is the service firm
Is the brand e.g. Singapore Airlines (SIA)
Frontline employees are important:
Core part of the service product - employees are the most visible
element -> deliver service + affect service quality
Is the service firm in the eyes of the customer
Is the brand - it is the employees who determine whether the
brand promise is delivered
Affect sales - Sell, cross-sell and up-sell
Key driver of customer loyalty - anticipating customer needs and
customising the service delivery, and building personalised
relationships
Determine productivity
Boundary spanners:
Service personnel who directly interface with customers
Tend to experience significant stress except for genuine feelings of
friendliness towards customers
Satisfaction sabotage:
May occur when employee morale is so low that frontline staff
members become hostile to customers or fellow employees
7.3 Explain why the work of frontline service employees is so
demanding, challenging and often difficult
Frontline work is difficult and stressful:
Boundary Spanning
Links the inside of an organisation to the outside world, operating
at the boundary of the company
