THE IMPACT OF A CUSTOMER SERVICE INTERVENTION AND FACILITY DESIGN ON FIRM PERFORMANCE

The purpose of this research was to investigate the impact of a custom er service intervention and store design on store performance within a regional food retailing chain. A longitudinal study examines the orga nization's implementation of a customer service intervention which uti lized new service standards and customer feedback mechanisms. Moreover , the chain provided a natural experiment, since the forty-six stores in this chain represented three levels of facility design ranging from the traditional supermarket to the extended ''store of the future'' f ormat. A theoretical model relating the customer service intervention, variations in store design, and customer satisfaction to sales perfor mance was developed. Using both operational performance data from each of the stores and 1,537 responses from customer satisfaction surveys, a LISREL model was used to test the predictive fit of the model. The results indicate that both the store design and the customer service i ntervention had a significant, positive impact on customer satisfactio n which, in turn, significantly affected sales performance (sales per labor hour). In addition, the customer service intervention had a dire ct effect on sales performance, although there was no support for a di rect relationship between store design and sales performance. This res earch provides a theoretical basis in helping management understand ho w to leverage customer service for improved sales performance.