Emerald

Presents the findings of a study performed on data from a large bank’s retail‐banking operations. Illustrates the relationship of customer satisfaction to customer loyalty, and customer loyalty to profitability, using multiple measures of satisfaction, loyalty, and profitability. An estimate of the effects of increased customer satisfaction on profitability (assuming hypothesized causality) suggests that attainable increases in satisfaction could dramatically improve profitability.

Relationship marketing requires a thorough understanding of the long‐run perspective of the supplier‐customer interaction. The concept of customer loyalty can be applied to emphasize the behavioural and attitudinal aspects of this interaction. This study investigates the antecedents of future customer loyalty in the commercial airline industry by applying structural models under four prototypical past loyalty conditions. These conditions are based on behavioural and situational descriptors and labelled in analogy to Day’s compositional approach. It is shown that the superiority of relative attitudes claimed by Dick and Basu cannot be confirmed. Corporate image of the service provider is, along with service quality and customer satisfaction, a powerful and illustrative component for explaining future customer loyalty. When comparing the a priori defined conditions (low, latent, spurious, and true loyalty) it turns out that the structural evaluative differences can be partially interpreted by the phenomena which are described as affective and calculative commitment in the literature. However, it is claimed to consider situational factors such as the character of the buying and decision‐making process in much more detail.

Notes that the premiss of all efforts to achieve customer satisfaction is the basic assumption that customer satisfaction leads to customer loyalty. Although this thesis sounds reasonable, empirical studies indicate that satisfaction often is only a weak indicator of customer loyalty. This can partly be explained by shortcomings in satisfaction measurement. In applying unidimensional rating scales, it is assumed that customers who give the same satisfaction score also experience the same emotions, cognitions and intentions. This assumption is questionable, for satisfaction also has a qualitative dimension. Presents a qualitative satisfaction model, which results in five different qualitative satisfaction types with different patterns of emotions, cognitions and intentions. Results from an empirical study suggest that these satisfaction types imply different levels of the risk that even satisfied customers terminate a business relationship and switch to competitors.

There is some acceptance of the idea that services and products are so intertwined that the process for development is the same, but there has been no rigorous empirical evidence to support that contention. Uses data collected in in‐depth interviews with 80 senior level managers in 16 different firms, 25 group discussion sessions with 388 executives in 241 additional firms, and from a mail survey of 217 senior managers in firms from 11 differing service categories. In all three phases, elements of the service innovation process were examined. Examines the general similarity to new product development and concentrates on the major factors differentiating successful from unsuccessful service innovation. Concludes that there is some similarity between product and service innovation processes, but that significant differences exist, with the service arena demonstrating more of a lack of new service strategic planning, reliance on competitive imitation for new concepts, and less presence of innovation champions. Successful firms in new service development more closely fit innovations with the current business than do unsuccessful firms. They also present more of an opportunity for a champion to stay and manage a new offering after launch. There is no apparent difference in the formality of the process between successful and unsuccessful managers, with most service firms reporting a more ad hoc process.

Describes research which continues the quest to model performance using structural equation models. The objective is to provide meaningful and substantively interpretable predictions of process performance using structural equation modelling. Develops structural equation models which clearly define the performance relationships for a backroom bank card remittance process using criteria such as process quality errors, employee turnover rates, labour productivity, on‐time delivery, and unit cost. Also defines the idea of a process quality equilibrium point (error rate) using structural equation modelling, and investigates how to use these structural equation models to help set internal and external standards of performance.

An internal customer′s (i.e. employee′s) satisfaction with a service firm can be significantly influenced by service encounters experienced with internal service providers. For example, a loan officer′s satisfaction with the bank he/she works for may well be influenced by internal services provided by the data processing group. Introduces the concept of the “internal service encounter” and presents the results of an initial study of internal service encounter satisfaction. The empirical study builds on previous research in using the critical incident methodology to examine internal services in a large US bank. Indicates that internal customers are similar to external customers in that, with a few interesting differences, the same types of events and behaviours distinguish satisfactory and dissatisfactory incidents in both internal and external encounters. Implications for managers and suggestions for future research are also presented.

While a vast literature exists on management/leadership, little systematic attention has been given to whether the difference in character between service‐and non‐service production processes demands a different style of management. Because of the direct contact between the client and service provider (particularly at the lowest level of the organisation), optimal reciprocal communication processes, both horizontal and vertical, form an important success factor and prime marketing tool for service systems. This article highlights the role of the manager/leader in optimising the exchange of information between client and service organisation. In this vein, the transactional, transformational and transinformational leadership styles will be contrasted.