In many business markets, manufacturers seek service-led growth to secure their existing positions and continue to grow in increasingly competitive environments. Using longitudinal data from 513 German mechanical engineering companies and latent growth curve modeling, this study offers a fine-grained view of the financial performance implications of industrial service strategies. By disentangling the revenue and profit implications of industrial service strategies, findings reveal that such strategies increase both the level and the growth of manufacturing firms’ revenue streams. In contrast, they reduce the level but improve the growth of manufacturers’ profits. Results further suggest that services supporting the clients’ actions (SSC) and services supporting the supplier’s product (SSP) affect performance outcomes in different ways. SSCs directly affect revenue and profit streams. In turn, SSPs display only indirect effects on financial performance mediated through SSCs. A moderator analysis identifies two organizational contingencies that facilitate service business success: Only companies with decentralized decision-making processes and a high share of loyal customers can expect favorable financial results from industrial service strategies. In summary, this research provides significant insights and managerial guidance for turning service strategies into financial successes.
The service–profit chain (SPC) has served as a prominent guidepost for service managers and researchers alike. This meta-analysis provides the first comprehensive test of the SPC, showing that all the proposed links are statistically significant and substantial. However, the effect sizes vary considerably, partly according to the type of service provided. Meta-analytic structural equation models show that internal service quality translates into service performance through various mechanisms beyond employee satisfaction, and they highlight the importance of the service encounter and customer relationship characteristics for customer responses. The findings not only indicate the need to integrate complementary paths in the SPC framework but also challenge the implicit SPC rationale that firms should always maximize employee satisfaction and external service quality to optimize firm performance.
During the past two decades, service guarantees have received increased attention as a means for service firms to attract and retain customers and gain a competitive edge in the marketplace. Although many academic studies, referring to diverse service guarantee aspects, have appeared during this time, a synthesis of research is needed to clarify what researchers have learned about service guarantees and what remains unknown. To evaluate the state of published research on service guarantees, 109 articles published from 1985 to 2008 are collected and analyzed. The resultant review reveals a significant change in the type of research being performed, including a shift toward greater interest in the impact of service guarantees on consumer behavior and service firms. However, a significant shortfall marks empirical work directed toward the internal and operational effects of service guarantees. The effects of service guarantees on service performance, service recovery, and return on service guarantee investments are topics in need of further research.
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