Executive Summary
The conventional service–profit chain (SPC) proposes that a firm’s financial performance can be improved through a path that connects employee satisfaction, customer orientation, customer satisfaction, and customer loyalty. Although its practical value is undisputed, there are some implementation problems related to the conventional SPC. These are mainly related to the construct of customer satisfaction and the notion that a permanent raise of customer satisfaction becomes increasingly difficult, and thus firms are seeking alternative means to raise customers’ loyalty. These natural limits of customer satisfaction management lead to the question whether there are additional ways to foster strong customer–company bonds to improve financial performance. Consequently, more companies are attempting to build deep, meaningful, long-term relationships with their customers.
In light of these issues, the authors develop and test a complemented SPC that is built on social identity theory, in addition to the classical satisfaction concept. The additional constructs in this SPC are customer–company identification and employee–company identification, which involve the degree to which customers and employees identify with a company to fulfill self-definitional needs and the resultant emotional reactions from this identification. Accordingly, customer–company identification represents a different perspective on the customer–firm relationship from the classic customer satisfaction construct. The authors propose that both SPC parts (the conventional part and the social identity–based part) are of a complementary nature. Thus, the authors argue that, in general, firms that successfully manage both SPC parts perform better than firms that are successful only in managing either the satisfaction or the social identity–based part. The authors tested the extended SPC using a large-scale triadic data set. This set included matched data from 258 employees and 597 customers of 109 German travel agencies as well as secondary data on the financial performance of the travel agencies. The authors find strong support for the extended SPC, which accounts for important customer (loyalty and willingness to pay) and firm outcomes (financial performance). In addition, the effects of company identification exist incrementally beyond the effects of the conventional SPC.
This study has important managerial implications because it offers an additional way to influence firm profits relative to the conventional SPC. Compared with the management of a satisfaction-based SPC, the management of social identification would require a largely different approach. For example, firms that are interested in raising employees’ job satisfaction might work on specific aspects, such as skill variety or task significance. Similarly, actions that aim to raise customer satisfaction might include a range of aspects (e.g., reliability, responsiveness, tangibles), as indicated by influential concepts, such as SERVQUAL. In contrast, social identity–based actions might focus on triggering group thinking among employees and customers. This includes actions to raise the salience of the company as a group category, which could be accomplished, for example, by stressing favorable comparisons between the in-group (the focal company) and out-groups (e.g., other companies) and by organizing events that foster a group feeling among employees and customers.
Biography
Christian Homburg is Professor of Marketing and Chair of the Marketing Department at the University of Mannheim, Germany. He also serves as director of this university’s Institute for Market-Oriented Management. Since 2007, he has also been a professorial fellow in the Department of Management and Marketing at the University of Melbourne. He holds a master’s degree in Business Administration and Mathematics and a PhD in Business Administration from the University of Karlsruhe, Germany, and a PhD honoris causa from the Copenhagen Business School, Denmark. He also holds a habilitation degree from the University of Mainz, Germany. His research interests include market-oriented management, buyer–seller relationships, and business-to-business marketing. He has published in Journal of Marketing, Journal of Marketing Research, Strategic Management Journal, Journal of the Academy of Marketing Science, and International Journal of Research in Marketing. He is also the founder of Professor Homburg & Partners, an internationally operating management consulting firm.
Jan Wieseke is Professor of Marketing and Chair of Marketing Department at Ruhr-University of Bochum, Germany. He currently leads the research project Evaluation of Predictors of Service Quality, which is supported by a grant of the German Research Foundation (WI 3146/1-2). His research interests center on internal marketing, services marketing, the employee–customer interface, and the application of social identity theory in marketing settings. Jan serves as associate editor of British Journal of Management. His work has been published in outlets, including Journal of the Academy of Marketing Science, Marketing Letters, Journal of Marketing Theory and Practice, and Journal of Vocational Behavior.
Wayne D. Hoyer holds the James L. Bayless/William S. Farish Fund Chair for Free Enterprise in the McCombs School of Business at the University of Texas at Austin. Dr. Hoyer joined the faculty of the University of Texas in the spring of 1981 after receiving his PhD (1980), MS (1979), and BS (1976) from Purdue University. His major area of study is consumer psychology. Dr. Hoyer’s research interests include consumer information processing and decision making, customer insight and customer relationship management, and advertising information processing (including miscomprehension and humor). Dr. Hoyer has published more than 60 articles in academic journals, such as Journal of Consumer Research, Journal of Marketing Research, Journal of Marketing, Journal of the Academy of Marketing Science, Journal of Retailing, and other marketing and psychology forums. His 1998 article on assortment perceptions (with Susan Broniarczyk and Leigh McAlister) won the 2003 O’Dell Award from the American Marketing Association (for the article appearing in Journal of Marketing Research that has had the greatest impact on the field over the five years since it was published). He is coauthor of a textbook in consumer behavior with Deborah MacInnis (now in the 4th edition). His teaching interests include consumer behavior, customer strategy, and marketing communications. He has also taught internationally at the University of Mannheim, the University of Muenster, the Otto Bleisheim School of Management in Germany, the University of Bern in Switzerland, and Thammasat University in Bangkok, Thailand. He has also been a research fellow at the University of Cambridge.
Journal of Marketing, Volume 73, Number 2, March 2009
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