Customer Satisfaction and Links to Customer Profitability: An Empirical Examination of the Association Between Attitudes and Behavior

Magnus Söderlund · Mats Vilgon

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Customer Service Quality and Loyalty Consumer Market Behavior and Pricing Customer churn and segmentation

Abstract

This paper explores links between customer satisfaction, repurchase intentions, purchase behavior, and customer profitability with empirical data on attitudes, behavior, and profitability at the customer level of analysis. Purchase behavior and profitability data, derived from the accounting system of a firm, are matched with the responses of the firm's customers to survey questions distributed prior to the behavior and profitability outcomes. The analysis reveals a strong link between customer behavior and customer profitability, while modest links exist between repurchase intentions and subsequent behavior. Only a weak and non-significant direct link can be observed between customer satisfaction and customer profitability. This paper, then, questions customer satisfaction's commonly assumed role as a proxy for profitability.

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References

1992The balanced scorecard : measures that drive performance 1990The Effect of a Market Orientation on Business Profitability 1998Consumers and Their Brands: Developing Relationship Theory in Consumer Research 1990Market Orientation: The Construct, Research Propositions, and Managerial Implications 1990Zero defections: quality comes to services.1993The Antecedents and Consequences of Customer Satisfaction for Firms 1993Cognitive, Affective, and Attribute Bases of the Satisfaction Response 1992The Changing Role of Marketing in the Corporation

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