The Value of Measuring Customer Satisfaction
53 Pages Posted: 16 Jul 2015 Last revised: 14 Jan 2017
Date Written: January 1, 2017
A growing number of service firms now collect customer satisfaction ratings, along with objective service performance measures, for each service transaction. However, little is known about whether these two types of data are substitutes or complements, from both a conceptual and an applied point of view. This paper answers this question via the use of unique data consisting of individual-level cross-sectional and time-series measures of objective service performance, customer satisfaction, and purchase behavior. Using theory from the customer satisfaction literature, the data are applied to a two stage model of customer satisfaction and interpurchase time. The results suggest that the two sources of data provide complementary insights. In other words, customer satisfaction data provide information on business outcomes over and above that obtained from objective service performance data. The benefit of using and the cost of collecting these data are also quantified. The results are consistent across two different - quick service restaurant and auto rental - service industries, suggesting that they may be generalizable.
Keywords: Customer Satisfaction, Service Quality, Expectation Disconfirmation, Performance Inconsistency, Selection Bias, Quick Service Restaurants, Auto Rental
JEL Classification: L1, L8, M3
Suggested Citation: Suggested Citation