Service Profit Chain is a framework showing relationship among important
factors which bring revenue and profit growth in service industry.
Service has unique feature, which is that production and consumption occur simultaneously, so employees who are directly connected with customers should be satisfied.
Service Profit Chain shows a kind of circulation that is related to customer satisfaction and employee satisfaction.
External Service Profit Chain
Increasing service value makes customer satisfaction high and brings high customer royalty.
Customer having high royalty buys service again and again, and recommends
service to other people. It brings revenue growth.
Internal Service Profit Chain
Appropriate internal service, such as HR system, is generated by revenue growth and it makes employee satisfied. High employee satisfaction brings high employee royalty.
High royalty employee is motivated, works for a long time and achieves high service productivity. They bring high quality service.
Feature of Service Profit Chain
Factors of Service Profit Chain are outputs from activities so they are measurable by appropriate method, for example, employee satisfaction survey, labor productivity, customer satisfaction survey, repeat ratio and profitability ratio.