Page 239 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes Self Assessment

Fill in the blanks:
1. It would be very difficult and impracticable for a .............................. firm to be all things to
all people.
2. It is more .............................. to acquire customers than retain customers. But customer
retention becomes a challenge in the era of heightened competition and decreasing
customer loyalty.
3. Relationships between them .............................. and the service provider keep changing
from the time of their acquisition to their retention.
4. A customer’s purchase decision of a particular service largely depends on his
.............................. of the service.
5. Many service firms, placed under .............................. and control regimes, did not have
customer orientation and instead followed the transactional route, looking for short-term
objectives.
11.4 The Service-profit Chain Model

The ‘service-profit chain’ model is based on the following seven theorems (see also
Figure 11.4 below):
1. Profit and growth are linked to customer loyalty.
2. Customer loyalty is linked to customer satisfaction.
3. Customer satisfaction is linked to service value.
4. Service value is linked to employee productivity.
5. Employee productivity is linked to employee loyalty.
6. Employee loyalty is linked to employee satisfaction.
7. Employee satisfaction is linked to internal quality of work life (internalising the firm’s brand).
Figure 11.4: The Service-Profit Chain

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