Neglected outcomes of customer satisfaction

Document Information:
Title:	Neglected outcomes of customer satisfaction
Author(s):	Luo X, Homburg C
Journal:	Journal of Marketing, Apr 2007, Volume: 71 Issue: 2 pp.133-149 (17 pages)
Issn:	0022-2429

Keywords:	Advertising, Consumer Marketing, Customer Orientation, Customer Satisfaction, Employee Attitudes, General Management, Human Resource Management, Input-output Analysis, Management Attitudes, Marketing Competences, Organizational Performance, Performance Measurement, Performance Measurement (quality)
Article type:	Research paper
DOI:	10.1509/jmkg.71.2.133
Reference:	36BC850 (Permanent URL)
Abstract:	Purpose - To investigate influence of customer satisfaction (CS) on firm marketing efficiency and human capital performance. Design/methodology/approach - Summarizes CS literature studies in a useful CS 'outcomes' flowchart with main outcomes (customer-, efficiency-, employee, performance-related) each having subelements e.g. customer-related > behavioural intentions and customer behaviour > loyalty, repurchase, word-of-mouth, complaints, defection. Generates hypotheses regarding effects of CS on firms' advertising and promotion efficiencies and human capital performances - human capital being regarded here as employee and managerial talent. Findings - Tests these by longitudinal analyses of secondary data concerning 139 large US companies i.e. CS (American Customer Satisfaction Index), marketing efficiency (sales/marketing spend: COMPUSTAT, Competitive Media Reporting), employee and managerial talent (Fortune's America's Most Admired Corporations), and market concentration ( Herfindahl Index: COMPUSTAT). Uses data envelopment analysis to determine efficiency. Applies two-limit Tobit modelling, seemingly unrelated regression, and sensitivity and robustness analysis in testing several models. Concludes, inter alia, that CS increases a firm's future advertising/promotion efficiency and enhances human capital performance as well. Research limitations/implications - Seeks more research in this area. Practical implications - Suggests managers compare marketing efficiency and CS performance against competitors and use their (hopefully) superior results in recruiting, pay, and retention policies. Originality/value - Establishes that superior customer satisfaction results promotes human capital excellence and future advertising and promotion efficiency.