Dual emphasis and the long-term financial impact of customer satisfaction

Vikas Mittal, Eugene W. Anderson, Akin Sayrak, Pandu Tadikamalla

Research output: Contribution to journalArticle

177 Scopus citations

Abstract

This paper draws on the quality profitability emphasis framework of Rust, Moorman, and Dickson (2002) (Rust, Roland T., Christine Moorman, Peter R. Dickson. 2002. Getting returns from service quality: Revenue expansion, cost reduction, or both. J. Marketing 66(October) 7-24.) to examine the association between customer satisfaction and long-term financial performance among firms that achieve a dual emphasis (focusing on both revenue-expansion and cost-reduction simultaneously, rather than solely emphasizing one over the other). Using a longitudinal data set of 77 firms from the United States, we test this hypothesis and find that the association between customer satisfaction and long-term financial performance is positive and relatively stronger for firms that successfully achieve a dual emphasis. We build on the work of Rust, Moorman, and Dickson (2002), who investigated the financial impact of engaging in the process of achieving a dual emphasis. Collectively, these studies show that while achieving a dual emphasis is desirable for long-run financial success, the process of achieving a dual emphasis may not be as financially rewarding in the short run. Firms pursuing a dual emphasis need to consider both short- and long-term consequences of their strategy.

Original languageEnglish (US)
Pages (from-to)544-555
Number of pages12
JournalMarketing Science
Volume24
Issue number4
DOIs
StatePublished - Sep 1 2005

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Keywords

  • Customer satisfaction
  • Marketing strategy and metrics
  • Services marketing

ASJC Scopus subject areas

  • Business and International Management
  • Marketing

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