Lecture 5 – Profit and building customer loyalty
The relationship between frontline workers and customers’ needs to be the centre of management
Customer overlaps the frontline worker
Dimensions of service Quality
Tangibles – Appearance of equipment, facilities, and personnel
Reliability – Ability to perform the promised service dependably and accurately.
Responsiveness – Willingness to help customers and provide prompt service.
Assurance – Knowledge and courtesy of employees and their ability to convey trust and
Empathy – Caring, individualized attention the agency provides its patrons.
Content – Are standard and accepted procedures being followed?
Process – Is the sequence of events in the service process appropriate?
Structure – Are the physical facilities and organizational design adequate for the service?
Outcome – What change in status has the service affected?
Impact – What is the long range effect of the service on the customer?
Service Profit Chain
1. Customer loyalty drives profitability and growth
Customer loyalty is an important determinant of profit
A 5% increase in your customer loyalty can produce profit increases from 25% to 85%
Loyal customer provides all profits and covers losses incurred in dealing with less loyal