Service quality, profitability, and the economic worth of customers: What we know and what we need to learn

In the past, expenditures on quality have not been explicitly linked to pro fits because costs and savings were the only variables on which information was available. More recently, evidence about the profit consequences of se rvice quality stemming from other sources has been found. This article synt hesizes recent evidence and identifies relationships between service qualit y and profits that have been and need to be examined. The article views the literature in six categories: (1) direct effects of service quality on pro fits; (2) offensive effects; (3) defensive effects; (4) the link between pe rceived service quality and purchase intentions; (5) customer and segment p rofitability; and (6) key service drivers of service quality customer reten tion, and profitability. In each category, the author identifies what is kn own and then suggests an agenda of relationships needing validation and que stions needing answers. The article is organized around a conceptual framew ork linking the six topics.