Social Identity and the Service-Profit Chain

TLDR

The conventional service‑profit chain links employee satisfaction, customer orientation, customer satisfaction, and customer loyalty to improved firm financial performance. This article introduces a complementary SPC that integrates a conventional path with a social‑identity‑based path. The social‑identity path centers on customer and employee company identification as the core construct. Large‑scale triadic data confirm the extended SPC, showing that company identification boosts customer loyalty, willingness to pay, and firm financial performance beyond the conventional path.

Abstract

The conventional service-profit chain (SPC) proposes that a firm's financial performance can be improved through a path that connects employee satisfaction, customer orientation, customer satisfaction, and customer loyalty. In this article, a complementary SPC that is built on both a conventional path and a social identity-based path is introduced. The latter SPC path centrally builds on customer- and employee-company identification as a core construct. Using a large-scale triadic data set that includes data from employees, customers, and firms, the authors find strong support for the extended SPC, which accounts for important customer (loyalty and willingness to pay) and firm (financial performance) outcomes. In addition, the effects of company identification exist incrementally beyond the effects of the conventional SPC path.