Article ID: | iaor2000912 |
Country: | United States |
Volume: | 29 |
Issue: | 2 |
Start Page Number: | 62 |
End Page Number: | 72 |
Publication Date: | Mar 1999 |
Journal: | Interfaces |
Authors: | Rust Roland T., Keiningham Timothy, Clemens Stephen, Zahorik Anthony |
Keywords: | organization, personnel & manpower planning |
A method called ‘return on quality (ROQ)’ has been proposed to evaluate the financial impact of efforts to improve service quality. It quantifies the projected net present value of an improvement project and calculates return on investment. During 1995 and 1996, Chase Manhattan Bank applied the method in a controlled experiment with four test branches and four control branches within the retail banking network, with a two-day training program aimed at enhancing service delivery and customer satisfaction. Its primary purpose was to assess the usefulness of the ROQ approach in improving customer service. Largely because of the bank's merger with Chemical Bank, the study was not executed as planned. Despite this, the study showed favorable results from the training effort. The ROQ model facilitated interpretation of the study and appears useful for estimating the financial returns arising from service quality initiatives.