The question, whether customer satisfaction is a reliable indicator for successful financial investment is a rather new field of study. Mainly promoted by Fornell and his associates, the question at first sight, seems to be an empirical question, i.e. a question whether customer satisfaction has anything to add to prediction accuracy of financial performance models. However, this macro-economic view on customer satisfaction is just one of two possible views, the other being the question whether individual investor’s satisfaction provides any kind of clue as to future investment decisions taken by the respective investor. Already, the smooth surface of customer satisfaction models advocated in order to show correlations between investment and satisfaction begins to get wrinkled. Further worry lines emerge, once questions like “is customer satisfaction measured in a consistent fashion?” or “is customer satisfaction unanimously defined?” are asked. This brief research paper will ask exactly these questions and it will do so for the newly emerging field of research linking financial investment and performance with customer satisfaction. Given this agenda, the structure of this paper is straightforward. First, results of a search, gathering papers that deal with customer (Investor) satisfaction and financial performance or financial investment will be reported, then the respective definitions of customer satisfaction will be scrutinized for communalities and differences. Furthermore, differences in the measurement of customer satisfaction will be reported and assessed, and finally, results of the research scrutinized in this paper will be reported before the background of the results gathered so far. A summary of results and the most important conclusions to be drawn from this research will be reported in the final chapter of this paper.
At a glance
- Reviews eleven selected studies on customer satisfaction and financial investment
- Compares five ACSI-based studies with five studies using other data
- Uses Popper’s falsificationism to examine a hypothesis about definitions and measurement
- 31 sources in the bibliography
Table of Contents
1. Introduction
2. Methodology Selection of data
3. Definition of customer satisfaction
4. Measurement of customer satisfaction
5. Results
6. Conclusions
Aim and Topics
This paper examines whether research linking customer satisfaction to financial investment and performance can yield reliable conclusions when studies define and measure satisfaction differently. It reviews selected studies from both aggregate market and individual investor perspectives, asking whether their operationalizations are sufficiently comparable.
- Definitions of customer satisfaction and the confirmation/disconfirmation paradigm
- Selection and comparison of studies on satisfaction and investment
- Measurement using the American Customer Satisfaction Index
- Individual measures of investor and customer satisfaction
- Comparability of research findings across studies
- Relationships between satisfaction and financial performance
Excerpt from the Book
Definition of customer satisfaction
What customer satisfaction is meant to be, for some researchers is so apparent, that it needs no mentioning at all, let alone a definition, while others are convinced that “satisfaction is an overall post-purchase evaluation” and some authors think of satisfaction in general and customer satisfaction in particular as a cognitive process. However, a brief look in the literature shows quite considerable deviations in what customer satisfaction is expected to be. Howarth and Seth define customer satisfaction as the cognitive state of being adequately or inadequately rewarded for the sacrifices one has made. In a widely used model, customer satisfaction is integrated in the confirmation/disconfirmation paradigm. According to this model, customer satisfaction is defined as the difference between customers’ expectations of a particular product or service and the actual performance of the respective product. Although being a definition that is widely shared, if not to the degree suggested by Fornell, some modification even to this definition exist. E.g., Locke modified the model by adding a third variable, i.e., the importance a service or product has for a particular customer. Consequently, customer satisfaction is the difference between expectation and performance multiplied by the importance of the product. Depending on whichever definition is deployed in a study, results will vary. Unfortunately, this is not the entire list of competing definitions. Definitions differ with respect to affective connotations, i.e. some researchers define satisfaction explicitly as something that appears if “the experience was at least as good as it was supposed to be”. Others conceptualize satisfaction as a discrete or continuous variable with the extremes satisfied and dissatisfied. Hence, satisfaction does not equal satisfaction. Different studies include different concepts of “satisfaction”. Nevertheless, Fornell was right in claiming that most definitions of satisfaction refer to an assessment or an evaluation that follows a purchase and compares the performance whatever has been purchased to performance expectations formed pre-purchase. But, as Kanning and Bergmann outline, not even the widely shared minimum agreement about satisfaction being the result of some kind of comparison between performance and expectation provides solid ground, because (1) expectation is a rather vague concept, (2) expectations may be exceeded and it is not clear how this would figure in the concept of “satisfaction”, (3) the assumption that expectations and performance have the same importance.
Chapter Summaries
Introduction: Introduces the question of whether customer satisfaction can inform financial investment and outlines concerns about inconsistent definitions and measurements.
Methodology Selection of data: Explains the database search and selection of studies, discusses the limitations of conventional meta-analysis, and sets out a deductive approach.
Definition of customer satisfaction: Compares definitions of satisfaction, including post-purchase evaluation and the confirmation/disconfirmation paradigm.
Measurement of customer satisfaction: Examines the ACSI and measures used in studies of customers and individual investors, focusing on their different operationalizations.
Results: Discusses findings from studies using aggregate ACSI data alongside studies taking an individual perspective on satisfaction and investment.
Conclusions: Considers the implications of inconsistent definitions and measurements for interpreting links between satisfaction and financial performance.
Keywords
customer satisfaction, financial investment, financial performance, investor satisfaction, operationalization, measurement, American Customer Satisfaction Index, meta-analysis, confirmation/disconfirmation, expectations, shareholder value, investor behavior
Frequently Asked Questions
What is this paper about?
It examines research on the relationship between customer satisfaction and financial investment, with particular attention to how satisfaction is defined and measured.
What are its central topics?
The paper addresses definitions of satisfaction, measurement methods, the ACSI, individual investor satisfaction, and the comparability of studies linking satisfaction with financial performance.
What is the main research question?
The paper asks whether the impact of customer satisfaction on investment or investment performance can be assessed reliably when studies use different definitions and measures.
What research method does the author use?
The author reviews studies selected through database searches and uses a deductive approach informed by Popper’s falsificationism. The paper does not calculate a standardized effect-size statistic.
What does the main part of the paper cover?
It compares definitions and measurements of customer satisfaction before discussing studies using aggregate ACSI data and studies focused on individual customers or investors.
Which keywords characterize the paper?
Key terms include customer satisfaction, financial investment, operationalization, measurement, the ACSI, investor behavior, and financial performance.
How does the paper distinguish between macro and micro perspectives?
The macro perspective relates aggregate satisfaction measures to financial performance, while the micro perspective considers individual customers’ or investors’ satisfaction and behavior.
What role does the confirmation/disconfirmation paradigm play?
It provides a model in which satisfaction is connected to a comparison between expectations and actual product or service performance. The paper also discusses variations and difficulties in this definition.
Does the paper rely exclusively on studies using the ACSI?
No. It also examines studies that use individual-level measures, including measures of satisfaction with investment services and online brokers.
- Citation du texte
- Thomas Bister-Füsser (Auteur), 2011, Customer satisfaction and investment: Can different operationalizations provide reliable results?, Munich, GRIN Verlag, https://www.grin.com/document/170281
