Service-Profit Chain: Managers Matter

August 19, 2010

I am a huge fan of the Service-Profit Chain, which advocates that if you want to grow your business, you need to have loyal and satisfied customers, and satisfied and committed employees are the key to satisfied and committed customers. There is plenty of existing research to support these established links in the service-profit chain.

New research published in the Journal of Applied Psychology, one of our leading research publications, now suggests that the satisfaction and performance of the people that manage service employees also has a significant impact on the service-profit chain. As I discuss in the video, this new study of 306 store managers, 1615 service providing employees, and 57, 656 customers suggests that the performance and satisfaction of managers had direct effects on employee performance, customer satisfaction, and store revenue growth, in addition to the previous links between employee performance/satisfaction, customer satisfaction, and revenue growth.

Simply stated, my advice to companies based on this new research will now be you need to impress the socks off both your employees and the people that manage them directly if you want to impress your customers and grow your business. If you think you can impress your customers when your employees and their managers are disgusted with you, you are living in La La Land.

How you manage managers matters a lot if you want your business to thrive.

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The Service-Profit Chain

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Comments (4)

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  1. I may still purchase the article but thanks for the video and distilling the findings! Is it just me, or does it seem like confirming wisdom and common sense with research is important? Great support for the investment in leadership development of front line managers.
    Thanks for the post!

    Bret L. Simmons Reply:

    You are so right, Steve, this is common sense, but oddly enough a piece of advice that until this time had not been confirmed with research. Research often does lag leading practice, but when the research gets on board it should help spread the practice. Thanks!! Bret

  2. So glad you posted this! When we expect our staff to treat customers extraordinarily well, it starts at the top. Leaders ALWAYS need to treat their internal customers as well as, if not better, than the way the paying customer should be treated. It can’t be one of those, do as I say, but not as I do scenarios. I focus on this service principle all of the time with my clients.

    It’s nice to have the statistics point out what we have already known, but haven’t always had the numbers to back it up so clearly.

    Kristina Evey
    Customer Experience Queen

    Bret L. Simmons Reply:

    Welcome, Kristina. I agree 100% with your comment. It’s really the only logical way to operate. Thanks for sharing! Bret