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<p> Does customer satisfaction really lead to increased firm value? Traditionally, most financial valuation models do not include customer-related metrics such as customer satisfaction in the process. Studies in marketing, on the other hand, have consistently found that customer satisfaction improves the ability to predict future cash flows, long-term financial measures, stock performance, and shareholder value. This research examines the impact that customer satisfaction has on firm value by employing valuation models borrowed directly from the practice of finance. The data used in the analysis is compiled by merging publicly available customer satisfaction data from the ACSI (American Customer Satisfaction Index) with financial data from COMPUSTAT, and Center for Research in Securities Prices between 1996 and 2006. The results indicate that a portfolio of stocks consisting of firms with high levels and positive changes in customer satisfaction will outperform lower satisfaction portfolios along with Standard &amp; Poor’s 500… Customer satisfaction does matter!</p>
</abstract>

Does customer satisfaction really lead to increased firm value? Traditionally, most financial valuation models do not include customer-related metrics such as customer satisfaction in the process. Studies in marketing, on the other hand, have consistently found that customer satisfaction improves the ability to predict future cash flows, long-term financial measures, stock performance, and shareholder value. This research examines the impact that customer satisfaction has on firm value by employing valuation models borrowed directly from the practice of finance. The data used in the analysis is compiled by merging publicly available customer satisfaction data from the ACSI (American Customer Satisfaction Index) with financial data from COMPUSTAT, and Center for Research in Securities Prices between 1996 and 2006. The results indicate that a portfolio of stocks consisting of firms with high levels and positive changes in customer satisfaction will outperform lower satisfaction portfolios along with Standard & Poor’s 500… Customer satisfaction does matter!

Does Customer Satisfaction lead to an increased firm value?

Associate Professor, Fordham University N.Y.

The Dean Samual B. and Evelyn R. Richmond Professor of Management, Owen Graduate School of Management, Vanderbilt University, Nashville (TN)

Assistant Professor Marketing, Trulaske College of Business, University of Missouri, Columbia (MO)

Global Chief Strategy Officer and Executive Vice President IPSOS Loyalty

Assistant Professor of Finance, College of Administrative Sciences and Economics, Koc University, Istanbul

NIM Marketing Intelligence Review

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Does Customer Satisfaction lead to an increased firm value?"}

Does customer satisfaction really lead to increased firm value? Traditionally, most financial valuation models do not include customer-related metrics such as...

Does Customer Satisfaction lead to an increased firm value?

Published Online: Jul 19, 2014

Page range: 8 - 15

DOI: https://doi.org/10.2478/gfkmir-2014-0073

© 2014

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.