Re‐thinking the conceptualization of customer value and service quality within the service‐profit chain

Abstract

PurposeTo provide an alternative view of customer value and service quality as conceptualized in the service‐profit chain.Design/methodology/approachA survey of the vast and diverse literature on the concepts of value and quality is used to reconceptualize these constructs as they are used in the service‐profit chain. The concept of intrinsic value and quality is proposed as an addition to the extrinsic value and quality concepts already apparent in the chain.FindingsThe service‐profit chain is based on the premise that profitability to a firm derives from customer satisfaction and loyalty, which, in turn, are derived from a customer's sense of value received. This value, it is argued, is calculated with reference to the perceived quality of what is received, balanced against the aggregated costs to the customer of availing themselves of the service. This paper questions the sufficiency of the assumption that value offered to a customer resides solely in the customer's perception of what has been experienced in and through the service encounter. Correspondingly, it is argued that value to the customer may reside also in intrinsic qualities or attributes of a service.Originality/valueThe idea of value and quality being built into a service offering (intrinsic) has value for both practising service managers and academic researchers. Several avenues for future investigation are posited.