Service Sells: Exploring Connections between Customer Service Strategy and the Psychological Contract

Article excerpt


Drawing on detailed qualitative case study evidence from four retail banking organisations, this article highlights the connections between customer relations strategy, the psychological contract and employee behaviour. The purpose of the research is to extend our understanding of the links between employees and customers by showing how this relationship evolves over time and by highlighting that a front-line employee's service orientation needs to be understood within the broader context of the employee's service experience. It is suggested that a better understanding of these connections could facilitate improved customer service standards and enhance the experiences of those working in service industries.

Keywords: customer; service climate; sales; psychological contract; strategy.

Increasingly, customer service staff are required to add a sales function to their core service role. Hairdressers, for example, no longer just style our hair and listen to our stories; they are required to sell us hair products. At the point where our hairdresser tells us we must buy this latest product to get the 'right look' the dynamic of the relationship shifts. This is because such active stimulation of demand highlights the previously hidden instrumental nature of the relationship and reminds both the customer and the hairdresser that the main aim of the game is for the firm to make money (Korczynski 2002). The requirement for employees to actively stimulate demand and encourage customers to make a purchase is likely to require a significant mind-shift for employees who have been recruited and trained to satisfy customer requirements and perform transactions without the immediate aim of making a sale. This article presents findings from in-depth case study research that explores how such shifts in customer relations strategy can impact on front-line service employees' attitudes and behaviours.

The purpose of this article is to highlight the importance of understanding employee behaviour in customer service settings not simply as one-off exchanges, but within the broader context of the employee's long-term customer service experience. This is done by contrasting the experiences of employees in four service organisations, two that changed from a service to a sales-focused strategy, and two that maintained a strategy focused on providing high levels of service with selling as an off-shoot of that strategy. In exploring the implications of these changes for employees the paper reviews the critical literature on key trends in customer service and discusses the impact that changes in the service climate of an organisation may have on an employee's psychological contract.

The article begins with an overview of the literature that highlights the link between customer relations strategy and employee behaviour. The case study industry and research sites are then introduced. The next section of the paper sets out the methodology employed in the research and then the findings from the four case study organisations are presented. The discussion section highlights the implications of these findings for customer service organisations and the conclusion points to the need for future research that takes a longer term view of employee responses to change.


Service climate and the psychological contract

Customer service work entails a complex threeway interaction between management, employees and customers (McCammon & Griffin 2000; Frenkel, Korczynski, Shire & Tam 1999). In service work, the customer is not one-step removed from the organisation but enters into the workplace through direct contact with employees, and it is this direct contact that makes service work unique (Bowen & Ford 2002; Korczynski 2002; Lengnick-Hall 1996). The uniqueness of service work relates to its intangibility, perishability and the simultaneous processes of production and consumption that characterise interactive service work (Bowen & Ford 2002). …