Lessons from a ten-year study of service quality in America

Date of publication: June 15, 1992


Excellent service is a profit strategy, and it is more fun. Excellent service is a profit strategy because it results in more new customers, more business with existing customers, fewer lost customers, more insulation from price competition, fewer mistakes requiring the reperformance of services, and lower marketing costs (because extra marketing monies do not have to be spent convincing customers to buy despite the firm's poor service record). Excellent service is more fun because it requires an "achievement culture" in which people are challenged to perform to their potential and recognized and rewarded when they do so. And achieving is fun. Service is a key component of value, and it is value that drives a company's success. To the customer, value is: what I get for what I have to give up. It is benefits received for the burdens endured. Burdens include both monetary costs and non-monetary costs (for example, an inconvenient location, unfriendly employees, an unattractive service facility). The most successful companies maximize benefits to customers and minimize the burdens. Service quality is instrumental in maximizing benefits and minimizing burdens. Since 1983 my colleagues and I have been studying service quality in America through the sponsorship of the Marketing Science Institute. We have learned many lessons from this research program. Today, I share five lessons about delivering excellent service of particular interest to marketing researchers

Leonard L. Berry


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