The service-profit chain is a widely adopted business theory that states that companies should take care of their employees first, because doing so will result in employees delivering a better customer experience, creating loyal customers who generate greater profits.
The theory was originally put forth in a Harvard Business Review article in 1994, but converting the service-profit chain into a workable model with demonstrable ROI has proved difficult. For years, there were two primary reasons for this difficulty: 1) the need to understand the linkage between customer experience and financial outcomes and 2) the need to understand the linkage between employee experience and customer experience.
In recent years, groundbreaking work has resulted in principles like the “wallet allocation rule.” The wallet allocation rule mapped out concrete solutions to the first challenge, understanding the linkage between customer experience and financial outcomes. The second challenge — linking employee experience and customer experience in a stable way — remains a topic of constant study.
Although complex behavior modeling may eventually help unlock detailed links between employee experience and customer experience, it’s possible for businesses to capture significant market gains right now simply by recognizing that employee experience amplifies customer loyalty. 

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