The paper presents research that examines the complex relationship between service quality and profitability in service operations. Specifically, the effects of operational performance and relational performance on customer satisfaction and loyalty in the unique context of industrial services are examined. A model of service performance effects on customer satisfaction and loyalty is introduced and tested in the fast food service industry using customer perceptions of provider performance rather than relying on providers' self-reported performance indicators. The research revealed that the benefit of establishing customer relationships emerges from the enhanced insight the supplier is able to gain regarding customer needs and wants. Upon learning of these needs and wants, the service provider can focus on operational means of meeting the needs and wants, and doing so in the lowest cost manner.
Journal of Operations Management – Elsevier
Published: Jun 1, 1999
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