The Service Profit Chain: : How Leading Companies Link Profit and Growth to Loyalty, Satisfaction, and Value

Citation

Morris, B. (1998), "The Service Profit Chain: : How Leading Companies Link Profit and Growth to Loyalty, Satisfaction, and Value", International Journal of Service Industry Management, Vol. 9 No. 3, pp. 312-313. https://doi.org/10.1108/ijsim.1998.9.3.312.3

As an academic one cannot help feeling slightly sceptical, despite the well‐earned respect in which its authors are held, about a book that comes with a back cover blurb that starts with “I am very angry with Jim Heskett, Earl Sasser and Len Schlesinger because I am deathly afraid that our competitors will read their book! The skunks have set forth in an accurate, profound, intelligible, and easily understandable way the core values, tenets, and practices that animate Southwest Airlines and can make any service business successful”. Nevertheless, while this UK academic would probably have used less colourful language than Herbert D. Kelleher, Chairman, President and CEO of Southwest Airlines Co. to express it, the enthusiasm of this reviewer is much the same as his.

The book develops and explains the service profit chain model, a model based on direct and strong relationships between profit, growth customer loyalty, customer satisfaction, the value of goods and services delivered to customers, and employee capability, satisfaction, loyalty and productivity. The model is based on strands of work carried out separately by the authors during the mid 1980s‐early 1990s, and has been developed from five years of research into why some service firms are consistently better at what they do than their competitors. The resulting model runs counter to some of the current accepted wisdom, particularly the belief that market share is the primary driver of profitability, but the evidence supporting the elements in the service profit chain is impressive. Having developed and explained the model, the authors then go on to demonstrate the ways in which high levels of performance can be achieved in each of the links in the chain. This part of the book is rich in anecdotes that provide living exemplars of how different organisations can and do pursue the same kinds of ideas and actions.

As one would expect from such gifted authors, the book is well written, wide‐ranging and always interesting.

It is clearly aimed primarily at managers, and provides a wealth of practical guidance; as such it justifies the comment (also on the back cover) from John B. McCoy, Chairman and CEO, Banc One Corporation, that it “Unveils a great model that managers can use to maximise both customer loyalty and profit. It links an action plan for managing all elements of a business with a thorough process for measuring results”. However, it is also a book for students of management, although likely to be of more relevance and appeal to those with managerial experience than undergraduates.

Only one thing stops this reviewer from wholly endorsing the view of David H. Maister that “If you read only one book on service industry management, this is the one to read ‐ and to re‐read”, and that is its unashamed focus on profit and growth. There is a vast range of service industries that are not driven by these motives ‐ indeed they often have more growth than they want, or can cope with ‐ and those, of course, are the service organisations in the voluntary, public and commonweal sectors. It would be great to have an analogous model of the service profit chain for non‐profit focused organisations. Can any of the authors be tempted?