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Applying the service profit chain in a retail environment: Challenging the “satisfaction mirror”

Rhian Silvestro (Warwick Business School, University of Warwick, Coventry, UK)
Stuart Cross (Boots the Chemist, Nottingham, UK)

International Journal of Service Industry Management

ISSN: 0956-4233

Article publication date: 1 August 2000

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Abstract

This paper reports the result of an exploratory study of the application of Heskett, Sasser and Schlesinger’s service profit chain to a single organisation, one of the UKs leading grocery retailers. The results showed correlations between profit, customer loyalty, customer satisfaction, service value, internal service quality, output quality and productivity; however there was no support for the claim that these are driven by employee satisfaction and loyalty. In fact, to the contrary, there was a strong correlation between employee dissatisfaction and store profitability. This research raises questions about the robustness of a central premise of the service profit chain, which is that strong business performance is the result of a mirror‐effect between employee and customer satisfaction. The paper considers the implications for management and calls for the development of a contingency based understanding of the drivers of business success.

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Citation

Silvestro, R. and Cross, S. (2000), "Applying the service profit chain in a retail environment: Challenging the “satisfaction mirror”", International Journal of Service Industry Management, Vol. 11 No. 3, pp. 244-268. https://doi.org/10.1108/09564230010340760

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MCB UP Ltd

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