Satisfaction, Repurchase Intent, and Repurchase Behavior: Investigating the Moderating Effect of Customer Characteristics

Abstract

Despite the claim that satisfaction ratings are linked to repurchase behavior, few attempts can be found that relate satisfaction ratings to actual repurchase behavior. This article fills this void by presenting a conceptual model for relating satisfaction ratings and repurchase behavior. The model is based on the premise that ratings observed in a typical customer satisfaction survey are error-prone measures of the customer's true satisfaction, and they may vary systematically on the basis of consumer characteristics. The authors apply the model to a large-scale study of 100,040 automotive customers. Results show that consumers with different characteristics have different thresholds such that, at the same level of rated satisfaction, repurchase rates are systematically different among different customer groups.The authors also find that the nature and extent of response bias in satisfaction ratings varies by customer characteristics. In one group, the response bias is so high that rated satisfaction is completely uncorrelated to repurchase behavior (r = 0). Furthermore, the authors find that, though nonlinear, the functional form relating rated satisfaction to repurchase intent is different from the one relating it to repurchase behavior. Although the functional form exhibits decreasing returns in the case of repurchase intent, it exhibits monotonically increasing returns in the case of repurchase behavior.

Keywords: Repurchase behavior, satisfaction ratings