Book description
Why are a select few service firms better at what they do -- year in
and year out -- than their competitors? For most senior managers, the
profusion of anecdotal "service excellence" books fails to
address this key question. In this pathbreaking book, world-renowned
Harvard Business School service firm experts James L. Heskett, W. Earl
Sasser, Jr. and Leonard A. Schlesinger reveal that leading companies
stay on top by managing the
service profit chain.
Based on five years of painstaking research, the authors show how
managers at American Express, Southwest Airlines, Banc One, Waste
Management, USAA, MBNA, Intuit, British Airways, Taco Bell, Fairfield
Inns, Ritz-Carlton Hotel, and the Merry Maids subsidiary of
ServiceMaster employ a quantifiable set of relationships that directly
links profit and growth to not only customer loyalty and satisfaction,
but to employee loyalty, satisfaction, and productivity. The strongest
relationships the authors discovered are those between (1) profit and
customer loyalty; (2) employee loyalty and customer loyalty; and (3)
employee satisfaction and customer satisfaction. Moreover, these
relationships are mutually reinforcing; that is, satisfied customers
contribute to employee satisfaction and vice versa.
Here, finally,
is the foundation for a powerful strategic service vision, a model on
which any manager can build more focused operations and marketing
capabilities. For example, the authors demonstrate how, in Banc One's
operating divisions, a direct relationship between customer loyalty
measured by the "depth" of a relationship, the number of
banking services a customer utilizes, and profitability led the bank
to encourage existing customers to further extend the bank services
they use. Taco Bell has found that their stores in the top quadrant of
customer satisfaction ratings outperform their other stores on all
measures. At American Express Travel Services, offices that ticket
quickly and accurately are more profitable than those which don't.
With hundreds of examples like these, the authors show how to manage
the customer-employee "satisfaction mirror" and the customer
value equation to achieve a "customer's eye view" of goods
and services. They describe how companies in any service industry can
(1) measure service profit chain relationships across operating units;
(2) communicate the resulting self-appraisal; (3) develop a
"balanced scorecard" of performance; (4) develop a
recognitions and rewards system tied to established measures; (5)
communicate results company-wide; (6) develop an internal "best
practice" information exchange; and (7) improve overall service
profit chain performance.
What difference can service profit chain management make? A lot.
Between 1986 and 1995, the common stock prices of the companies
studied by the authors increased 147%, nearly twice as fast as the
price of the stocks of their closest competitors. The proven success
and high-yielding results from these high-achieving companies will
make The Service Profit Chain required reading for senior,
division, and business unit managers in all service companies, as well
as for students of service management.
Leonard Berry Professor of Marketing and JCPenney
Professor of Retailing Studies, Texas A&M University, Author of
On Great Service and Marketing Services The authors
effectively integrate their wide body of research and thinking into an
incisive framework for organizational leadership.
James L. Heskett, is the UPS Foundation Professor of
Business Logistics at the Harvard Business School. He is also
co-author of Service Breakthroughs, The Service Management
Course, and Corporate Culture and Performance.
