The service profit chain

HESKETT J.L. – SASSER W.E. – SCHLESINGER L.A., The service profit chain. Free press, 1997

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CONTENTS

PART I: THE SERVICE PROFIT CHAIN A RATIONALE FOR EXCELLENCE

Chapter 1 – Setting the Record Straight

1.1. A World of Misleading Advice
1.2. Too Much Advice out of Context
1.3. The Tyranny of the Tradeoff
1.4. Emphasis on Symptoms vs. Causes
1.5. The “Trivialization” of Service
1.6. Fixation on Service Process Quality
1.7. The Service Profit Chain and Our Search for Evidence
1.8. Heskett and the Strategic Service Vision
1.9. Sasser and Customer Loyalty[/one_half_last]
1.10. Schlesinger and Determinants of Employee and Customer Loyalty
1.11. The Service Profit Chain
1.12. The Centrality of Value
1.13. Quality as One Element of Value
1.14. Price
1.15. Results, Costs, Price, Value, and Profit
1.16. Relationship to Service Profit Chain
1.17. What Difference Does It Make?
1.18. Spreading the world

Chapter 2 – Capitalizing on the Service Profit Chain

2.1. The Service Profit Chain
2.2. Managing for Results at Southwest Airlines and American Express
2.3. Profit and Growth Are Linked to Customer Loyalty
2.4. Customer Loyalty Is Linked to Customer Satisfaction
2.5. Customer Satisfaction Is Linked to Service Value
2.6. Service Value Is Linked to Employee Productivity
2.7. Employee Productivity Is Linked to Loyalty
2.8. Employee Loyalty Is Linked to Employee Satisfaction
2.9. Employee Satisfaction Is Linked to Internal Quality of Work Life
2.10. Comprehensively Relating Links in the Chain
2.11. Implications of the Service Profit Chain for Management
2.12. Measuring Across Operating Units
2.13. Communicating Results of the Self-Appraisal
2.14. Developing a “Balanced Scorecard”
2.15. Designing Efforts to Enhance Performance
2.16. Tying Recognition and Rewards to Measures
2.17. Communicating Results
2.18. Encouraging Internal “Best Practice” Exchanges
2.19. Questions for Management
2.20. Getting on with the Job: An Important Caveat

Chapter 3 – Managing by the Customer Value Equation

3.1. The Customer Value Equation
3.2. Results Produced for Customers
3.3. Process Quality
3.4. Price and Acquisition Costs
3.5. Customer Value Equation Relationships
3.6. Managing by the Customer Value Equation: What It Requires
3.8. USAA
3.9. British Airways
3.10. Requirements of Those Who Manage by the Customer Value Equation
3.11. Linking the Strategic Service Vision and the Service Profit Chain
3.12. Questions for Management

PART II: BUILDING PROFIT CHAIN CAPABILITY

Chapter 4 – Rethinking Marketing: Building Customer Loyalty

4.1. Defining the “New” Marketing: Adding the Three Rs to the Four Ps
4.2. Estimating the Lifetime Value of a Customer
4.3. Retention
4.4. Related Sales of New Products and Services
4.5. Referrals
4.6. Managing by the Three Rs
4.7. Measuring and Communicating the Lifetime Value of Customers
4.8. Identifying, Creating, and Enhancing Listening Posts
4.9. Recognizing and Creating Incentives to Build Customer Loyalty
4.10. Utilizing Customer Defections as Learning Opportunities Potential-Based Marketing
4.11. Identifying Share of Loyal Customers
4.12. Calculating Economic Impact of Customer Behavior Change
4.13. Lengthening Customer Relationships
4.14. Overall Impact of Potential-based Marketing
4.15. Implementing a Potential-based Marketing Effort
4.16. Mining Customer Data to Achieve Mass Customization
4.17. Achieving Mass Customization on a “Vertical” Data base
4.18. Achieving Mass Customization on a “Horizontal” Data base
4.19. BaseOrganizational Implications of the New Marketing
4.20. Questions for Management

Chapter 5 – Attaining Total Customer Satisfaction: Not Whether but When

5.1. The Xerox Experience
5.2. The Total Customer Satisfaction Imperative
5.3. Relationship of Customer Satisfaction and Loyalty
5.4. Relationship of Customer Satisfaction and Profitability
5.5. Total Satisfaction for Captive Customers
5.6. The Importance of Focus
5.7. The Tyranny of Averages
5.8. Satisfying Targeted Segments
5.9. The Ultimate Source of Focus: Affinity Groups
5.10. Measuring Customer Satisfaction and Loyalty
5.11. Customer Surveys
5.12. Customer Feedback
5.13. Marketing Research
5.14. Feedback from Frontline Personnel
5.15. Complementarity of Methods
5.16. Addressing Customer Satisfaction at the Limits: Apostles and Terrorists
5.17. The Economics of the Extreme
5.18. Investing in Existing versus new

Chapter 6 – Managing the customer employee “satisfaction mirror”

6.1. The service encounter
6.2. Evidence of the “satisfaction mirror”
6.3. Why the “satisfaction mirror” occurs
6.4. Preventing cracks in the mirror
6.5. From service encounter to relationship
6.6. Factors creating the successful service encounter
6.7. Achieving consistency in service encounters
6.8. Enlisting the customer in in relationship building
6.9. Engineering an organization for customer relationships
6.10. Developing the Service relationship triangle
6.11. Identifying Relationship-Critical jobs
6.12. Dedicated Servers or not?
6.13. Service teams or not?
6.14. Questions for management

Chapter 7 – Building a cycle of capability

7.1. Frontline frustration
7.2. Capability defined
7.3. Hiring for attitudes first, skills second
7.4. The Bugs Burger method
7.5. Selection by “Life themes”
7.6. Substituting Self-Selection for Selection
7.7. Involving customers in the process
7.8. Serving customers who qualify
7.9. Designing training as both Ends and Means
7.10. Providing Latitude and Limits
7.11. The traditional view
7.12. The Non traditional view
7.13. Investing in support systems
7.14. Information and Communication technologies
7.15. Facilities
7.16. Methods and materials
7.17. Field quality control “Safety Nets”
7.18. Service Guarantees
7.19. Latitude to fire customers
7.20. Providing consistent Reward and recognition
7.21. Fitting the elements together
7.22. Questions for management
7.23. Concluding comments

Chapter 8 – Developing processes that deliver value

8.1. Basic Tenets of process design that yield value
8.2. The world’ best hospital
8.3. The world’ best dinner show value
8.4. America’s first Deming prize winner
8.5. Formation of quality improvement teams
8.6. Development of the process
8.7. Policy Deployment
8.8. Quality in Daily work
8.9. Important techniques for process improvement
8.10. Service mapping
8.11. Pareto analyses
8.12. Cause-and-Effect (Fishbone) diagramming
8.13. Other process steps
8.14. Translating techniques into results
8.15. Value enhancement Versus quality improvement process
8.16. Questions for management

Chapter 9 – Designing service delivery systems that drive quality, productivity and value

9.1. Developing Single-Facility Service delivery systems
9.2. Planning system designs for the right amount of Employee latitude
9.3. Controlling custome behavior
9.4. The Ultimate customer control strategy: Self Service
9.5. Managing Information Support Systems to enhance customer loyalty and sales
9.6. Providing process visibility
9.7. Preventing Service errors
9.8. Developing and managing multisite networks
9.9. Network characteristics
9.10. Factors in network design
9.11. Degree of support for operating strategy
9.12. Need for interconnectedness
9.13. Need for standardization
9.14. Latitude allowed site managers: Preserving the core
9.15. Delivering services globally
9.16. The target market and the need for customization
9.17. “Total experience” services
9.18. Culturally sensitive services
9.19. Incorporating franchising into the strategy
9.20. “Employing” franchisees
9.21. “Enfranchising” employees
9.22. Questions for management

Chapter 10 – Attaining total customer satisfaction: doing things right the second right

10.1. Doing it right the first and second time
10.2. Getting customers to complain: The British Airways Experience
10.3. The problem
10.4. Some responses
10.5. External and internal service contracting
10.6. Customer service contracting
10.7. Internal service contracting
10.8. Supplier service contracting
10.9. Service guarantees
10.10. Questions in guarantee design
10.11. What’s the primary purpose
10.12. Internal guarantees
10.13. Impact on suplliers
10.14. The Economics of Service Guarantees
10.15. Putting Guarantees in context
10.16. Service recovery: a case for capability
10.17. The service recovery payoff
10.18. Questions for management

Chapter 11 – Measuring for effective man agement

11.1. Estimating the Lifetime Value of a customer
11.2. Fitting measurement to the business
11.3. Fitting measurement to purpose: relevance
11.4. The Xerox experience
11.5. The AT&T Universal Card experience
11.6. Taking process into account
11.7. Determining the form in which results will be transmitted
11.8. Other criteria for evaluating Measures and methods
11.9. Designing the Balanced Scorecard
11.10. Questions for management

PART III: PUTTING IT ALL TOGETHER

Chapter 12 – Reengineering the service organization for capability: Gains and Pains

12.1. The theory of managing change
12.2. Organization reengineering without a crisis
12.3. John Martin and Taco Bells
12.4. Actions
12.5. Gains
12.6. Pains
12.7. William Bratton and the NYPD
12.8. Actions
12.9. Gains
12.10. Pains
12.11. Arthur Martinez and Sears
12.12. Actions
12.13. Gains
12.14. Pains
12.15. Putting Organization Reengineering in context
12.16. Applying cosmetics
12.17. Picking movers and shakers
12.18. Creating a sense of urgency
12.19. Choosing the theme and vehicle
12.20. Preparing people
12.21. Getting the facts Straight and fast
12.22. Restructuring the organization
12.23. Undertaking new initiatives
12.24. Widening the competitive gap: sustaining effort
12.25. Observations
12.26. Questions for management

Chapter 13 – Leading and living service chain profit management

13.1. Service Profit Chain leadership at Wal-Mart
13.2. Service Profit Chain leadership at Southwest Airlines
13.3. Leading Service Chain Profit management
13.4. What service profit chain Leaders Do: supplying the “Extras”
13.5. Believing in and communicating the basics
13.6. Putting the employees first
13.7. Investing in customers
13.8. Maintaining measures and rewards that influence behavior
13.9. Communicating the message
13.10. Linking organization culture, performance, and the service profit Chain
13.11. Questions for management

Chapter 14 – Auditing Service profit chain management success

14.1. Leadership=Focus
14.2. Strategic service vision=Positioning, Leverage and consistency
14.3. Service profit chain=Value, satisfaction, and loyalty
14.4. Profit Model=Value to customers versus costs to providers
14.5. Performing the service profit chain management audit
14.6. Identifying the organizational limit
14.7. Assessing importance
14.8. Assessing curent practice
14.9. Measuring the Gaps
14.10. A final word