Does customer satisfaction matter to investors? findings from the bond market

Gene Anderson, Sattar A. Mansi

Research output: Contribution to journalArticle

50 Citations (Scopus)

Abstract

This article examines whether customer satisfaction is associated with key metrics from corporate bond markets-namely, credit ratings and cost of debt financing. The authors draw on theory in marketing and finance to predict how customer satisfaction should be associated with both measures. To test the hypotheses, they employ the American Customer Satisfaction Index (ACSI) database of more than 150 publicly traded firms during the period from 1994 to 2004. The empirical work controls for factors that are known to influence the bond market, such as firm profitability and risk, as well as potential unobservable factors. The findings indicate that firms with lower customer satisfaction exhibit lower credit ratings and higher debt costs-financial consequences of customer satisfaction not previously observed. The results also suggest that the association between ACSI and cost of debt is attenuated by the inherent level of risk faced by the firm.

Original languageEnglish (US)
Pages (from-to)703-714
Number of pages12
JournalJournal of Marketing Research
Volume46
Issue number5
DOIs
StatePublished - Oct 2009
Externally publishedYes

Fingerprint

Investors
Bond market
Customer satisfaction
Credit rating
Factors
Cost of debt
Finance
Debt
Debt financing
Costs
Firm profitability
Firm risk
Data base
Marketing
Corporate bonds

Keywords

  • Bonds
  • Cost of debt
  • Customer satisfaction
  • Financial performance
  • Yield spread

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics
  • Marketing

Cite this

Does customer satisfaction matter to investors? findings from the bond market. / Anderson, Gene; Mansi, Sattar A.

In: Journal of Marketing Research, Vol. 46, No. 5, 10.2009, p. 703-714.

Research output: Contribution to journalArticle

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