Profitability and customer satisfaction in services

Abstract

The work suggests a defining approach aimed at understanding the relations between client satisfaction and business profitability, with specific reference to services management. The paper makes use of the analysis of the reasons for the separation of the client satisfaction and cost containment orientations – a separation which is a weak point in the case of service businesses. It then develops a methodological approach for bringing together client satisfaction research and cost optimisation, the application of which is presented by means of a business case concerning a firm which offers a database service. This approach makes it possible to put in relationship the utility perceived by the customer with reference to the different attributes of the offer and the price which the customer is prepared to pay to obtain the utility. At the same time it makes it possible to compare the price thus determined and the effective cost of the activities which determine the services delivered. Research into compatibility between competitive and financial success is therefore allowed by reference to analysis of the service characteristics. These permit a joining together – the external and internal process of the company, or rather the value as perceived by customers (the relationship between utility and price sustained) and the cost sustained by the company in the generation of this value.

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