The employee-customer profit chain: estimating and managing the linkages

Lars Gronholdt and Anne Martensen

This paper examines the linkages between employee loyalty, customer loyalty and profitability. From a conceptual point of view, this employee-customer-profit chain is well founded and generally accepted.
  

The employee-customer profit chain: estimating and managing the linkages

Lars Grønholdt & Anne MartensenCopenhagen Business School

INTRODUCTION

Researchers at the Harvard Business School have developed the service-profit chain based on analyses of successful service organisations (Heskett et al., 1994). The chain establishes a series of linkages between profitability, customer loyalty and employee satisfaction, loyalty and productivity. The authors argue for the causal linkages in the chain as follows: Profit is a result of customer loyalty, driven by customer satisfaction. Satisfaction is largely a result of the customers' perceived value of the service they receive. And...

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