The long-term impact of service empathy and responsiveness on customer satisfaction and profitability: a longitudinal investigation in a healthcare context

Jun Ye (), Beibei Dong () and Ju-Yeon Lee ()
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Jun Ye: Xiamen University
Beibei Dong: Lehigh University
Ju-Yeon Lee: Iowa State University

Marketing Letters, 2017, vol. 28, issue 4, No 5, 564 pages

Abstract: Abstract Rising labor costs in healthcare industries have led many firms to underinvest in service empathy and responsiveness by downsizing staffing levels. Although such a strategy may help contain operating costs and improve productivity in the short run, its sustainability and long-term effect remain unclear, as the literature offers competing explanations of such an effect on customer satisfaction and overall profitability. Using 24 quarters of longitudinal patient satisfaction data and archival financial data from 25 clinical units in a large healthcare organization, this study examines how empathy and responsiveness influence profitability over time. The findings show that downgrading empathy and responsiveness allows firms to lower costs, resulting in immediate productivity benefits; however, this strategy has an enduring negative effect on customer satisfaction and ultimately hurts profitability in the long run.

Keywords: Customer satisfaction; Profitability; Empathy; Responsiveness; Service quality (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s11002-017-9429-2

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