The role of the service-profit chain inside the interaction between the service supplying company and the client

The paper analyses the role of the service-profit chain inside the interaction between the service supplying company and the client. The service – profit chain proposes a relation connecting the profitability and the client’s loyalty and satisfaction to the employees’ satisfaction, capability and productivity

value of the service.The employees' satisfaction and loyalty begin with their selection and training, but they need an investment in information technology and a support from the organization, which will aloe them the decision to serve the consumers.If we look attentively upon every link between the previously mentioned matters, we will be able to understand how the service-profit chain operates in its wholesness 3 .

The client's loyalty determines profitability and growth
In order to maximize the profit, the managers aimed at being the first, or, at least, being put on the first places, from the domain or from the industry they activate in.Recently, it has been discovered that the consumer's loyalty is the most important determinant of the profit.Reicheld and Sasser4 estimate that a 5% improvement of the client's loyalty can determine growths of the profit of 25% up to 85%.The two authors believe that the qualitative market share (measured function of the clients' loyalty) is as important as the quantitative one.

The consumer's satisfaction determines his loyalty
The leading services supplying companies have constantly tried to quantify the consumer's satisfaction.For example, XEROX Corporation, using a five-point scale, has researched 480.000 consumers per year, measuring their satisfaction regarding the product or the services.The corporation has come to the conclusion that the relation between the scores and the loyalty differ a lot, function of the situation in which the consumer acknowledges himself as being very satisfied (number 5) or only satisfied (number 4).The consumers which have marked the number 5 had a six times greater probability to buy again, that those who have marked 4.

The value determines the consumer's satisfaction
Nowadays consumers are strongly oriented towards value.The consumer's value is measured by means of comparing the results obtained with all the costs used to obtain the service.

The employees' productivity determines the value
For example, the clients of Southwest Airlines Company have a very high perception of value.The clients value the frequent flights, the services supplied in time and the friendly employees.The employees' capacity of obtaining a superior productivity involves a growth of the value delivered to the consumer.

The employees' loyalty determines the productivity
The traditional measures, regarding the losses due to the employees' fluctuation, focus only upon the costs of recruitment, employment and training of those who will replace the leaving employees.In many of the services sectors, the real cost of fluctuation is a slow down of productivity, as well as, a low satisfaction of the consumer.

The employees' satisfaction determines loyalty
A study performed in 1991, in USA, has revealed that 30% of the non-satisfied employees intended to leave the company.This percentage regarding the potential ratio of fluctuation is three-times greater than in case of the satisfied employees.

The inside quality determines the employees' satisfaction
The inside quality of the working environment and condition has the greatest contribution to the employees' satisfaction.This inside quality is measured by the employees' feelings regarding their work, their colleagues and company.At the same time, the inside quality is characterized by the employees' attitudes one towards another, as well as, by the manner they serve one another in the organization.

Studies and Scientific Researches Economic Edition 15, 2010
An audit of the service -profit chain helps the company to establish what determines their profit and to suggest actions which might lead to a long-term profitability.With this view, the managers of the service supplying companies should have responses for the following questions: 1. How shall we define the loyal clients? 2. Which is the ratio of expenses and incentives directed towards the preservation of the existent clients? 3. Why are our clients giving up the services of the company?4. Are the information about the clients' satisfaction collected in an objective, consistent and periodic manner? 5. Which are the instruments used for obtaining the feedback from the organisation consumers?6.How is the information about the consumers' satisfaction used with the view of solving the clients' problems?7. How is the external value of the services measured?8. How is the information about the clients' perception of value disseminated towards those who are responsible for the projection and design of the products or of the services?9. Do the organization efforts for improving the external quality of the services reinforce the recovery of the previous errors?10.How is the employees' productivity measured?11.In what degree the measures for productivity identify changings regarding the quality and quantity of the service obtained per entry unit?12. How is the employees' loyalty obtained?13.Did we make enough efforts in order to determine the level of preserving our employees?14.Is the employees' satisfaction such a way measured as to allow a connection with similar measures regarding the consumer's satisfaction?15.Are the employees' selection criteria adjusted function of the clients' perception about what is important?16.In what degree are the measures for consumer's satisfaction and loyalty used in order to recognize the employees' merits and to reward them?17.Do the employees know who are their clients?18. Are the employees content with the technological and personal support they receive at their working place?Finally, we present, here, a synthesis of some empirical records regarding the service -profit chain.