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Why
Service-Profit Chain?
It is estimated that two-thirds of customers
who defect do so because of poor
service.
In order for customer service to
drive profits, every link in your service-profit chain – employee
capability, job satisfaction, productivity, employee loyalty and customer
satisfaction – must be strong.
Straight Line
between Superior Service and Sustainable Profit Growth
Delivering top quality service
must be brought to the top of your company's needs hierarchy as one can draw
a straight line between superior service and your
sustainable profit growth. To achieve
success, you must make superior service second nature of your organization.
What is
Service-Profit Chain?
The service-profit chain is a
powerful phenomenon that stresses the importance of
people –
both employees and
customers
– and how linking them can leverage corporate performance. The
service-profit chain is an equation that establishes the relationship
between corporate policies, employee satisfaction, value creation, customer
loyalty, and profitability.
Need for
Seamless Integration of the Service-Profit Chain Links
A seamless integration of all
components in the service-profit chain –
employee satisfaction, value
creation, customer satisfaction, customer loyalty, and profit and growth –
links all the critical dynamics of top customer service. "The company
guides, nurtures, and
empowers
its employees, and the employees play a vital role in securing customer
satisfaction and the benefits that accrue from it."1
Satisfying Your Employees
Success comes through
people.
If you understand what
motivates
people, you have at your command the most powerful tool for dealing with
them to get them achieve extraordinary results.
"When companies are effective in satisfying their employees, employees
stay longer, make a deeper commitment to the business, recommend ways to
improve the company's products and services, and work harder to satisfy the
customer".1
"In almost every
survey of factors that motivate employees in the workplace, job
satisfaction is at or near the top of the list, far surpassing pay and
benefits."4 Creating a work environment that encourages rapid
response to customers' needs and attentive follow-through is the key to
leveraging the power of your service-profit chain...
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The Fun Factor
Why would people want buy from you if they
don't enjoy
doing so? Making what you have to sell fun to buy is simply taking the whole
process one step further. "If you can make your customers laugh, and excite
them with your vision of what life can be, they are not going to walk
into your outlets, but run into them. Running a successful business
should be fun for
you, and there's every reason why you should be able to communicate that
sense of fun to your customers. Certainly, if you aren't having fun, you
probably aren't running a successful business."5...
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Satisfying
Your Customers
Customer satisfaction is a critical component of your
sustainable profitability and growth. To make make customer service an
essential part of your corporate culture and produce empowered and motivated
employees who are committed to ever higher standards of customer service and
satisfaction you must demonstrate continuously that in your company's order
of priorities, customer service comes before all else. You must develop a
system for collecting customer satisfaction data and relaying this
information to those responsible for
value creation, and develop a system that rewards people for building
and maintaining customer relationships...
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Customer Loyalty
Delighted and loyal customers will
return for follow-on business without considering alternatives of comparing
the competition...
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Holistic
Approach to Customer Relationships
Unleashing the power of the
service-profit chain will improve your
performance. Moving from a focus on transactions to a focus on customer
relationships delivers sustainable financial advantages. Your must look
beyond the arithmetic value of individual transactions to all the ways you
can serve the customer to capture and develop lasting relationships.
Customer Partnership
"Customer partnership is a shared journey to
create a future for both parties that is better than either could have
developed alone."3
The customer is the foundation of your organization's success. In
today's turbulent times of rapid and
chaotic change, "no force is more grounding and stabilizing than a
partnership with customers."3
Creating a partnership with customers will help your organizations maintain
the focus you need to make good decisions and harness the power and
commitment you need to weather volatile times. Customer partnership is more
than "putting customers first", or finding mutually satisfactory
solutions to shared problems, or a dedication to excellence in every
sale or service encounter. It also requires commitment to forging long-term
relationships that create
synergies
of knowledge, security, and adaptability for both parties...
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80/20 Theory
of Effective Selling and Competing
80/20 Principle helps you to direct your attention where the real threat
of competition exists. 80% of your revenue comes from 20% of your customers.
Know who your top revenue-producing customers are and make sure you meet
their needs to win their loyalty. "Focusing on 20% of your customers is a
great deal easier than focusing on 100% of them." Being customer centered on
all your customers is impossible. "But cherishing the core 20% is both
feasible and highly rewarding."6...
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