The evaluation stage in the service elimination decision‐making process: evidence from the UK financial services sector

Abstract

PurposeThe purpose of this study is to offer service practitioners evidence about: the factors that financial institutions consider in order to evaluate the impact on the entire company of an eventual decision to eliminate a financial service from the range; the degree of influence that these factors exert on management; and the contextual conditions that shape the above degree of influence.Design/methodology/approachThe research is based on 20 in‐depth interviews with higher echelon managers from an equal number of UK financial institutions and a mail survey of 112 specific elimination case histories from an equal number of UK banks, building societies and insurance companies.FindingsThe impact of a financial service's eventual elimination on the relationships of the company with its customers is rated as the most influential evaluation factor. Other influential evaluation factors are the impact on the public image of the financial institution and the impact on the sales and the profitability of other financial services in the range. However, the degree of influence is largely situation specific.Practical implicationsThe implications are twofold. First, in managers' attempts to project the impact of a financial service's eventual elimination from the range they may avoid imitating competitors. Second, managers may avoid being mechanistic in evaluating the impact of eventual elimination decisions.Originality/valueThis paper represents the first empirical attempt to shed light on the way in which service companies evaluate the impact of a service's elimination from the range.