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Employee Satisfaction, Customer Loyalty, and Financial Performance
An Empirical Examination of the Service Profit Chain in Retail Banking
Gary W. Loveman
Harrah's Entertainment, gloveman{at}hbs.edu
The service profit chain is a simple conceptual framework linking employee satisfaction and loyalty, customer satisfaction and loyalty, and financial performance. Although widely used by practitioners, the service profit chain's series of hypothesized relationships between employee, customer, and financial outcomes has not been rigorously tested using data that span all components of the model. Panel data from the branches of a large regional bank are used to test individually each of the service profit chain's constituent hypotheses. The results generally support the model, but there are some exceptions. Further work is needed to refine and simplify several critical measures and to enhance the analysis to test the service profit chain as a complete system of related hypotheses.
Journal of Service Research, Vol. 1, No. 1,
18-31 (1998)
DOI: 10.1177/109467059800100103
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