Service Profit Chain Matrix

The Service Profit Chain Matrix is a strategic management tool that links service quality, employee satisfaction, and customer loyalty to profitability. It helps businesses understand the cause-and-effect relationships between internal service quality and external customer satisfaction, ultimately driving financial performance.

At a very high level, the Service Profit Chain Matrix is used in the context of business, customer service, management.

Service Profit Chain Matrix quadrant descriptions, including examples
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What is the Service Profit Chain Matrix?

A visual explanation is shown in the image above. The Service Profit Chain Matrix can be described as a matrix with the following quadrants:

  1. Internal Service Quality: Focuses on the quality of internal processes and support systems; e.g., efficient internal communication.
  2. Employee Satisfaction: Measures how satisfied and motivated employees are; e.g., high employee morale.
  3. Customer Satisfaction: Assesses the satisfaction level of customers with the service provided; e.g., positive customer feedback.
  4. Profitability: Evaluates the financial performance resulting from satisfied employees and customers; e.g., increased revenue.

What is the purpose of the Service Profit Chain Matrix?

The Service Profit Chain Matrix is a powerful framework that illustrates the connections between employee satisfaction, service quality, customer loyalty, and profitability. Developed by Harvard Business School professors, this matrix emphasizes that satisfied and motivated employees are more likely to deliver high-quality service, which in turn leads to satisfied and loyal customers. These loyal customers are more likely to make repeat purchases and recommend the business to others, driving profitability.

In practice, the matrix is used by businesses to identify areas where improvements can be made to enhance employee satisfaction and service quality. For example, a company might invest in employee training programs, improve working conditions, or implement recognition and reward systems to boost employee morale. On the customer side, businesses might focus on improving the customer experience through better service delivery, personalized interactions, and efficient problem resolution.

By analyzing the relationships within the Service Profit Chain Matrix, businesses can develop strategies that align employee and customer satisfaction with financial goals. This holistic approach ensures that all aspects of the business are working together to achieve sustainable growth and profitability.

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What templates are related to Service Profit Chain Matrix?

The following templates can also be categorized as business, customer service, management and are therefore related to Service Profit Chain Matrix: Product-Market Matrix, 4 Ps Marketing Mix Matrix, AI Capability-Value Proposition Alignment Matrix, AI Innovation-Value Alignment Matrix, AI Maturity Matrix, AI-Value Proposition Alignment Matrix, AI-Value Proposition Matrix, AIDA Marketing Matrix. You can browse them using the menu above.

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