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The Cost of Customer Satisfaction: A Framework for Strategic Cost Management in Service Industries

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  • Antonella Cugini
  • Antonella Caru
  • Fabrizio Zerbini
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    Abstract

    Customer satisfaction has long been considered a milestone in the path towards company profitability. Although it is widely acknowledged that customer satisfaction leads to higher and more stable revenues, the relationship between customer satisfaction levels and the costs that the company incurs in producing and delivering customer services has received far less attention, and the research results vary significantly across sectors. In fact, there seems to be little guidance for linking company costs to the key elements involved in providing customer satisfaction in services, thereby diminishing the ability of a company to manage its activities accordingly. In this paper, we propose and test a framework to analyse and manage the relationship between company costs and customer satisfaction in service industries. Based on a case study from the tourism industry, we show how service components can be used as a key medium to link customer satisfaction to the cost of service production and delivery. In doing so, we provide guidance for identifying specific sources of customer satisfaction and assessing their cost, thereby extending to service industries previous research on strategic cost management.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/09638180701507130
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal European Accounting Review.

    Volume (Year): 16 (2007)
    Issue (Month): 3 ()
    Pages: 499-530

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    Handle: RePEc:taf:euract:v:16:y:2007:i:3:p:499-530

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    Cited by:
    1. François Meyssonnier, 2012. "Le contrôle de gestion des services : réflexion sur les fondements et l'instrumentation," Working Papers hal-00694326, HAL.
    2. François Meyssonnier, 2011. "Le contrôle de gestion des services : Réflexion sur l'instrumentation et les concepts," Post-Print hal-00650555, HAL.
    3. PETE Stefan & CARDOS Ildiko Reka, 2010. "A Managerial And Cost Accounting Approach Of Customer Profitability Analysis," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 570-576, July.
    4. Lino Cinquini & Andrea Tenucci, 2011. "Management Accounting for Service: A Research Agenda," Working Papers 201102, Scuola Superiore Sant'Anna of Pisa, Istituto di Management.

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