Do Customer Satisfaction Scores Link to Business Revenue Over Time?

Abstract

This study examines whether changes in customer satisfaction scores, derived from the American Customer Satisfaction Index (www.acsi.org), are associated with changes in business revenue. The study analyses firms or brands in nine industries. For most of those industries, the study uses data for the period 2005-2019; for cars the data covers 2002-2016. The analysis is simple and transparent: I create year-on-year differences in firm satisfaction, and year-on-year differences in firm revenue, and calculate the correlation between the two. In the case of cars, revenue by brand is not available, therefore I use US market share data sourced from Knoema.com. I find essentially zero correlation between year-on-year satisfaction changes and changes in business revenue or market share.

Keywords: Customer satisfaction, business revenue, business growth, brand growth

JEL Classification: M31