Service productivity vs service quality: a zero-sum game?

Abstract

Purpose The purpose of this paper is to verify the relationship between productivity and quality in the services sector. More specifically, this study investigates the relationship between productivity and customer satisfaction and its effect on a firm’s performance. In addition, this study investigates the roles of productivity and customer satisfaction in the structural relationships among variables. Design/methodology/approach A theoretical model was proposed among innovation, productivity, customer satisfaction and firm performance. A sample of 127 firms from data sets of the American Customer Satisfaction Index and COMPUSTAT was collected. To test the hypotheses, this study used ordinal least squares analysis and path analysis. Findings The findings of this study verified that a positive relationship exists between productivity and customer satisfaction and that service productivity and customer satisfaction are positively associated with a firm’s performance. In addition, customer satisfaction was found to fully mediate the relationship between productivity and a firm’s performance. Research limitations/implications This study only focused on a short period for each variable due to the difficulty of matching all the data sets used for measuring each variable, which limited the observation of the different effects of service productivity among industries. Practical implications The findings of this study suggest that managers can improve productivity without sacrificing customer satisfaction. In addition, services firms should consider innovation, productivity and customer satisfaction in a holistic way because all of these affect a firm’s performance. Furthermore, services firms need to pay more attention to customer satisfaction, which plays an important role as a mediator in increasing a firm’s performance. Originality/value This study highlights the importance of the relationship between productivity and customer satisfaction in the services sector. In particular, this study extended the theory of service productivity by Rust and Huang (2012) to explore the role of service productivity and customer satisfaction in measuring a firm’s performance.

Quality Management, Customer Inputs and Operational Complexity in Knowledge-Based Service Operations

“…However, as observed in the extant literature OC escalates when CIs are incorporated into the service delivery process (Kreye, 2019;Scerri & Agarwal, 2018). Since CIs are a necessity in the service delivery process, the role of the customer has heightened from being a mere service evaluator to being an indispensable partner in the service production as they undertake various tasks of production (Bellos & Kavadias, 2018;Rew et al, 2018). Nevertheless, a high degree of customer contact increases OC (Sampson & Chase, 2020).…”

“…Since most service operations require CI, the notion of OC has become an essential focus of analysis. The role of the customer has escalated from just being the evaluators of the service experiences to also being the partners in the service delivery (Rew et al, 2018). Bellos and Kavadias (2018) established how customers should be assigned control of various tasks of service production.…”

Comeback workout: QM practices and the health and fitness industry

“…Second, this paper has indicated that implementing QM practices in the health and fitness industry can enable a better understanding of sustaining and increasing their customers. Managers in a service industry need to develop creative thoughts of service operations which can make their organization successful (Rew et al , 2018). Recent research suggests that one of the positive aspects of QM practices is the mutual relationships among each practice, which could enhance the organization’s performance (Talib et al , 2013).…”

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“…Technical quality tries to interpret what are the expectations, the functional quality tries to find the way in which the organization interprets the characteristics and translates them to technical specifications of work, and the corporate image deals with the perceptions of the consumers about the organization of the service that depends on: technical and functional quality, price, external communications, physical location, appearance of the site, and the competence and behaviour of service firms' employees [13]. SQ is the consequence not only of the performance of service, but also of the interaction between customer and firms [14]. SQ is an important determinant of customer satisfaction which in turn influences customers' loyalty [15].…”