A Longitudinal Analysis of Customer Satisfaction and Share of Wallet: Investigating the Moderating Effect of Customer Characteristics

Journal of Marketing, Vol. 70, No. 4, October 2006

Posted: 18 Jul 2006

See all articles by Bruce Cooil

Bruce Cooil

Vanderbilt University - Statistics

Timothy L. Keiningham

Ipsos Loyalty - North America

Lerzan Aksoy

Koc University

MIchael Hsu

affiliation not provided to SSRN

Abstract

Customer loyalty is one of the most important strategic objectives of managers globally. Research has investigated the relationship between customer satisfaction and loyalty in a variety of contexts. These predominantly cross-sectional studies however have focused on customer retention as the primary measure of loyalty. The impact on share of wallet has been much less investigated. This research aims to 1) provide the first longitudinal examination of the impact of changes in customer satisfaction on changes in share of wallet and 2) determine the moderating effects of customer age, income, education, expertise and length (age) of relationship using data from the Canadian banking industry. Data from 4319 households using 12,249 observations over a five-year period indicates a positive relationship between changes in satisfaction and share of wallet: in particular, the initial satisfaction level and the conditional percentile of change in satisfaction significantly correspond to changes in share of wallet. Two variables, income and length of the relationship, were found to negatively moderate this relationship. Other demographic and situational characteristics were found to have no impact.

Keywords: Customer Satisfaction, Share of Wallet, Demographics, Loyalty, Consumer Behavior, Latent Class Regression

JEL Classification: M31, D12, C23

Suggested Citation

Cooil, Bruce and Keiningham, Timothy L. and Aksoy, Lerzan and Hsu, MIchael, A Longitudinal Analysis of Customer Satisfaction and Share of Wallet: Investigating the Moderating Effect of Customer Characteristics. Journal of Marketing, Vol. 70, No. 4, October 2006. Available at SSRN: https://ssrn.com/abstract=916583

Bruce Cooil (Contact Author)

Vanderbilt University - Statistics ( email )

Nashville, TN 37203
United States

Timothy L. Keiningham

Ipsos Loyalty - North America ( email )

Parsippany, NJ
United States

Lerzan Aksoy

Koc University ( email )

Cayir Cad. No: 5 Istinye
Sariyer 80910, Istanbul, 34450
Turkey

MIchael Hsu

affiliation not provided to SSRN ( email )

No Address Available

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