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Introduction: Is Customer Satisfaction (Ir)relevant as a Metric?

Published on Sep 1, 2016in Journal of Marketing
· DOI :10.1509/JM.80.5.1
V. Kumar7
Estimated H-index: 7
(J. Mack Robinson College of Business)
Sources
Abstract
In the preceding article, Fornell, Morgeson, and Hult (2016b) find that customer satisfaction produces abnormal returns and that customer satisfaction does have a direct and tangible financial benefit for firms. Given the unconventional nature of their findings, the authors’ research will be of great interest to marketing academics. In addition, this research will be of direct relevance to marketing practitioners in demonstrating the financial impact of customer satisfaction and reemphasizing the importance of managing customers effectively.
  • References (8)
  • Citations (10)
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References8
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#1Claes FornellH-Index: 42
#2Forrest V. MorgesonH-Index: 14
Last. G. Tomas M. Hult (MSU: Michigan State University)H-Index: 65
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AbstractSorescu and Sorescu (2016) and Bharadwaj and Mitra (2016) have made a number of insightful observations and suggestions for future research regarding stock returns on customer satisfaction. They have also provided a series of assessments of a study by Fornell, Morgeson, and Hult (2016) that focus on abnormal returns on customer satisfaction. Building on the original study, as well as the two commentaries and previous research, the study’s authors argue that the published empirical eviden...
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#1Sundar G. Bharadwaj (Indian School of Business)H-Index: 26
#2Debanjan Mitra (College of Business Administration)H-Index: 9
AbstractThe question of whether customer satisfaction is mispriced by the stock market has been debated over the past decade, yet it remains unintegrated with the broader asset pricing literature. The authors critique Fornell, Morgeson, and Hult (2016), focusing on that article’s missed opportunities in addressing theoretical lacuna and empirical challenges that might establish the satisfaction mispricing anomaly. In doing so, they distinguish mispricing from value relevance, classify two broad ...
5 CitationsSource
#1Alina Sorescu (A&M: Texas A&M University)H-Index: 11
#2Sorin M. Sorescu (A&M: Texas A&M University)H-Index: 15
AbstractThe authors reexamine the relation between customer satisfaction (measured by the American Customer Satisfaction Index) and long-term stock returns using statistical tests that are well specified in the presence of industry clustering. Their results are consistent with those of Fornell, Morgeson, and Hult (2016), who find positive abnormal stock returns for companies with high levels of customer satisfaction. However, the authors also identify three caveats that could affect the robustne...
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AbstractA debate about whether firms with superior customer satisfaction earn superior stock returns has been persistent in the literature. Using 15 years of audited returns, the authors find convincing empirical evidence that stock returns on customer satisfaction do beat the market. The recorded cumulative returns were 518% over the years studied (2000–2014), compared with a 31% increase for the S&P 500. Similar results using back-tested instead of real returns were found in the United Kingdom...
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This extensive literature review highlights the state of the art regarding the relationship between customer satisfaction and loyalty, both attitudinal and behavioral. In particular, it brings to light several issues that should be carefully considered in analyzing the efficacy of customer satisfaction in explaining and predicting customer loyalty. In fact, for many years companies all around the world have heavily invested in customer satisfaction in the hope of increasing loyalty, and hence, c...
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Abstract Can a marketer drive the stock price of the firm? Yes, it should be possible. Toward this endeavor, the authors develop a framework to link customer equity (CE) (as determined by the customer lifetime value metric) to market capitalization (MC) (as determined by the stock price of the firm). The authors test the framework in an empirical field experiment with two Fortune 1000 firms in the business-to-business and business-to-consumer contexts, respectively. The findings show that (1) a ...
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