Service-profit chain: What are profitable business models and smart service strategies?

The enhanced relationship service-profit chain model is introduced as a plausible explanation for previous problems encountered in the service-profit chain literature and also to provide a point of reference for future research into the association between internal service operations and external operations and sustained superior customer outcomes.


Given the importance of ensuring program relevance, quality, and impacts, as well as the use of customer satisfaction surveys in accountability, understanding the relationship that exists between employee performance and customer satisfaction is critical to identifying how well your organization is fulfilling its mission. An effective framework that is aligned with the organizational customer-value-service-profit chain and is dynamic to that chain, will undoubtedly deliver value-added benefits.


Looking further into the future, digitalization of the entire value chain will affect service significantly. The service-profit chain model tries to link all the components required to make your organization successful. The service-profit chain links various aspects and tasks required to deliver superior service and profits. The theory of service-profit chain (also referred to as the relationship profitability model) will have to be introduced and explained briefly to set the context for the research.


Service quality positively, due to their control over the service delivery process, which leads to customers satisfaction. When you master the concept of the service profit chain, you can unlock the secret to higher profits. The link starts at policies that reward employees in order to drive up satisfaction, which leads to greater customer satisfaction and loyalty, which in turn leads to profits.


The service-profit chain, developed from analyses of successful service organizations, puts hard values on soft measures. Making your business more profitable involves looking at ways to increase sales revenue as well as decreasing your costs and benchmarking your business to see where you can save money. The frameworks can be used for marketing strategies, pricing strategies, innovation, product management, customer analysis, or general business strategy.


In order to have successful customer service throughout the process of manufacturing, distribution, and the end result of a customer purchase, it must first start with top management focused and committed to holistic customer service in the supply chain. An objective is also to evaluate these initiatives against service quality dimensions.


The lack of technology systems geared toward the service supply chain. And also, is a barrier in the quest to turn potential to profit. The chain shows a clear link between that which happens inside the organization and the quality of service provided to external customers. Current research shows that customer engagement has a clear and direct positive association with firm performance.


Service climate captures employees consensual perceptions of organizations emphasis on service quality. The service profit chain is a simple conceptual framework linking employee satisfaction and loyalty, customer satisfaction and loyalty, and financial performance. The service-profit chain establishes relationships among profitability, customer loyalty, and employee satisfaction, loyalty, and productivity.

Want to check how your Service-profit chain Processes are performing? You don’t know what you don’t know. Find out with our Service-profit chain Self Assessment Toolkit: