Customer value proposition and service profit chain of the Chick-fil-A restaurant for enhancing customer experience.

• Author: Lee, Sang-Shik
• Position: Report

1. INTRODUCTION

   Chick-fil-A restaurant is the second largest quick-service chicken restaurant in United States, behind KFC. As of March 2011, Chick-fil-A operates and franchises 1,546 restaurants in 39 states and the District of Columbia. Though concentrated in the southeastern United States, the franchise has expanded into more of the country. Annual sales in 2010 reached $3.58 billion. These figures reflect an 11.37 percent increase over the chain's 2009 performance and a same-store sales increase of 5.62 percent. Since the first Chick-fil-A restaurant opened in 1967, the company has posted 43 consecutive annual sales increases.

   There are reasons for those lofty figures mentioned above. The success of Chick-fil-A franchise has partly been attributed to their unique customer value and to the service experience offered to their customers. The purpose of this study is to investigate the key factors of its operational excellence by using customer value proposition and service profit chain model. According to service profit chain model, a firm's operating strategy and service delivery system could offer better service value to customers and service value drives better customer loyalty and finally financial performance. This paper explains the success story of Chick-fil-A in terms of service profit chain model.

2. LITERATURE REVIEW

   2.1 Customer Value Proposition

   A customer value proposition is a business strategy to deliver on total customer experience to the customers. Kaplan and Norton(2004) said, "Strategy is based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation." A customer value propositions is a business statement that describes why a customer should buy a product or use a service. Anderson, et al.(2006) suggested that the value proposition should describe the value of the experience that an organization provides to its customers through its products and services. Moreover, Barnes, et al.(2009) defined a value proposition as "a clear, compelling and credible expression of the experience that a customer will receive from a supplier's measurably value-creating offering".

   2.2 Key Success Factors in Quick Service Restaurant

   A lot of papers in hospitality area have researched to increase the customer satisfaction and/or loyalty in a quick service restaurant (QSR). The key success factors to drive sales of QSR are quality, speed and customer service. Quality refers to the overall quality of the food at your chain, the quality at a particular restaurant, the overall quality of the brand, and the quality of the brand at a particular restaurant. In the Quick-Service Industry, speed is imperative; for the average Quick-Service Restaurant (QSR), nearly 55%-75% of their sales are accounted for through drive-thru.

   2.3 Service Profit Chain

   The concept of service profit chain was first introduced in Harvard Business Review by Heskett et al. in 1994 and was published as a book, "The Service...