Human aspect in service quality: EPSI benchmark studies

Abstract

This article presents an integrated approach for analysing interaction between employee and external customer satisfaction. It is generally accepted that satisfied employees would support and enhance satisfaction among external customers, which in turn should further strengthen the employee relationship with the employer. However, empirical evidence for such positive circles is rare in a broad sense, although such circles have been illustrated for individual companies and other organisations. The present article takes as its starting point a model where employee satisfaction drives customer satisfaction. It is applied to Swedish data at the industry level. The empirical part is based on major studies of Swedish employees and customers in 2007, conducted within the EPSI Rating, combined with some results from the previous two years. It is found that strong correlation from the employee side to external customer satisfaction constructs exists. Improving employee satisfaction will have a significant positive impact on customer satisfaction, and, in particular on the perceived service quality as reported by customers. From the empirical results it is possible to specify priority maps for aspects within the employee sphere to concentrate on when the maximal effects on the customer satisfaction should be targeted. These vary to some extent from industry to industry and between stakeholder groups, while some more general patterns are also found. As a complement to the industry level study, the same approach is also employed by a small sample of companies within the Swedish banking sector. Here a positive correlation is also found, but this is less significant, and the time pattern is also more difficult to estimate from the small dataset currently available. From the analysis it is still possible to point out the main drivers for increasing customer satisfaction and consequently also loyalty on a company level. The study points out a number of challenging issues for further research in order to validate causal relationships between employee satisfaction and customer results.

Keywords:

• customer and employee satisfaction
• service quality
• recognition
• retention
• non-financial value
• performance indicators

Notes

1. ECSI (1998), Foundation and Structure. In the end of 1990s the European initiative to stimulate the development of National Customer Satisfaction studies was initiated. It started in the mid 1990s by discussions emerging from experience in Sweden, where a national platform was established in 1989, and from the USA, where a national study similar to the Swedish model, commenced in 1994.

2. Based on an explicit account of both sample and model uncertainty.

3. The choice of industries reported here is based on the criterion to obtain a reasonable number of observations in order to be able to estimate the specific models by the pre-described precision (cf. section 2.1).

4. However, for proper priority setting, the ratio between (expected) benefit and cost should be used, not merely the benefit side as costs may differ substantially from driver to driver, see Eklöf et al. (2000).