Customer Satisfaction and Its Impact on the Future Costs of Selling

Lim, Leon Gim; Tuli, Kapil R.; Grewal, Rajdeep

doi:10.1177/0022242920923307

Cited by 65 publications

(48 citation statements)

References 105 publications

(168 reference statements)

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“…In addition, we find evidence consistent with the underlying reasons for this effect of satisfaction on operating costs being via reduced direct and indirect costs to deal with customer complaints and cost savings from firm introduced changes and technologies that benefit from greater customer trust and goodwill. Our study supports the recent findings of Lim, Tuli, and Grewal (2020) in offering evidence of lower operating costs as an important efficiencyenhancing benefit of satisfying customers. It also suggests additional cost-reducing mechanisms that should be explored in studies of how satisfaction contributes to firm performance in other types of markets.…”

Section: Introductionsupporting

confidence: 91%

“…We find similar effects when Choice State utilities are included in our generalization testing, and Lim et al's (2020) recent findings suggest that these effects generalize within the ACSI sectors. Our results suggest that the efficiency-enhancing benefits of customer satisfaction may arise via reduced customer complaints and employee productivity gains, and enhanced customer trust and goodwill while Lim et al (2020) identify reduced costs of selling in competitive markets.…”

Section: Limitations and Future Researchmentioning

confidence: 81%

“…Studies in competitive markets reveal some empirical support for theorized revenue-enhancing links at the customer level (e.g., Homburg, Koschate, and Hoyer 2005; Wangenheim and Bayón 2007) and firm level (e.g., Fornell et al 1996; Morgan and Rego 2006). On the cost-reducing side, while some attention has been paid to the efficiency with which satisfaction is created (e.g., Anderson, Fornell, and Rust 1997; Mittal et al 2005), only recently has evidence emerged concerning the satisfaction–cost linkage (Lim, Tuli, and Grewal 2020). However, because the firm-level effects of customer satisfaction have not previously been explored in noncompetitive markets, and MBA theory does not distinguish between different kinds of markets in its core propositions, it is unclear how the theorized revenue and cost mechanisms may work (if at all) in regulated utility markets.…”

Section: Conceptual Framework and Industry Contextmentioning

confidence: 99%

See 2 more Smart Citations

Customer Satisfaction and Firm Profits in Monopolies: A Study of Utilities

Bhattacharya¹,

Morgan

Rego

2020

Journal of Marketing Research

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There is a growing body of evidence that customer satisfaction is predictive of firms’ future financial performance. However, studies of this relationship have been limited to competitive markets, and monopolistic markets have been largely ignored. This study explores the large and important utilities market and exploits its unique regulatory requirements that generate detailed and reliable operating and accounting data to examine the overall relationship between customer satisfaction and utility profit and establish the causal mechanisms involved. Using data from U.S. public utility firms, the authors show that even when customer satisfaction does not affect future revenues, it does positively predict future profitability by reducing utility firm operating costs. More specifically, they find that higher satisfaction reduces the costs of utility firm distribution, customer service, and sales and general administration expenses. These findings and additional post hoc evidence are consistent with the notion that customer satisfaction (1) generates efficiency-enhancing benefits for utility firms by lowering the direct and employee engagement costs of dealing with dissatisfied customers and (2) fosters greater trust and cooperation from customers. This study has important implications for both managers and regulators and provides important new insights for market-based asset theory and regulatory economic theory.

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Section: Introductionsupporting

confidence: 91%

Section: Limitations and Future Researchmentioning

confidence: 81%

Section: Conceptual Framework and Industry Contextmentioning

confidence: 99%

See 1 more Smart Citation

Customer Satisfaction and Firm Profits in Monopolies: A Study of Utilities

Bhattacharya¹,

Morgan

Rego

2020

Journal of Marketing Research

View full text Add to dashboard Cite

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“…The ACSI score, our measure of customer satisfaction (Cust_Satis), is a widely used measure of customer satisfaction by academics (e.g. Luo and Bhattacharya 2006;Malshe and Agarwal 2015;Lim, Tuli, and Grewal, 2020). After merging ACSI data with data on CEO and firm characteristics, we are left with 1,224 firm-year observations from 1995 to 2018.…”

Section: Testing H3 -Prosocial Ceos and Customer Satisfactionmentioning

confidence: 99%

CEOs’ Prosocial Behavior, Their Careers and Corporate Policies

Feng

Ling

et al. 2020

SSRN Journal

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This paper examines the associations of Chief Executive Officers' (CEOs') prosocial behavior with their career paths and corporate policies. Using individuals' involvement with charitable organizations as a proxy for prosocial behavior, we find that prosocial individuals are promoted to CEOs faster than non-prosocial individuals. In addition, compared with firms with non-prosocial CEOs, firms with prosocial CEOs tend to have lower executive subordinate turnover, implement more employee-friendly policies, experience higher customer satisfaction, and engage in more socially responsible activities. We also find that firms with prosocial CEOs have higher firm value. These results are corroborated when we compare changes in corporate policies and firm value around different types of CEO turnovers: a prosocial CEO replacing a non-prosocial CEO versus other types of CEO turnovers. Our results thus suggest that prosocial CEOs are more likely to make corporate decisions that benefit a wide range of firm stakeholders.

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“…Customer satisfaction is a personal feeling of pleasure or disappointment, based on the perceived performance of a product or service against the expected outcome (Iglesias et al, 2019;Lim et al, 2020). However, patient satisfaction is a wellestablished indicator used in evaluating the quality of medical care and an essential tool for promoting improvements in clinical care (Yılmaz et al, 2019;Gonzalez, 2019).…”

Section: Introductionmentioning

confidence: 99%

Patients’ Level of Satisfaction from Pharmaceutical Services Provided by Private Pharmacies Using the SERVQUAL Model Analysis

Utami

Ghozali

Hadning

et al. 2020

ijrps

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Customer satisfaction is an essential aspect of quality of service. In healthcare, customer satisfaction, also known as patient satisfaction is an indicator for measuring the quality of service and how happy the patient is with the professional services received in the industry. This parameter is essential for all healthcare organizations, as it is used for improving service delivery and strategic goals. Therefore, this study aimed to examine the patients’ level of satisfaction regarding professional pharmaceutical services provided by certified pharmacists of 14 private pharmacies in the Kasihan Subdistrict, Bantul Regency, Special Region of Yogyakarta, Indonesia. The nonexperimental descriptive design with a cross-sectional method was employed in this study. It involved 308 participants and was conducted from November 2018 to May 2019. The patients’ level of satisfaction was measured using the Service Quality (SERVQUAL) approach involving five dimensions, namely; reliability, responsiveness, assurance, empathy, and tangibles. The results showed that the patients’ level of satisfaction on the average was satisfactory, at 80.2%. Besides, satisfaction based on reliability was 82.5%, responsiveness was 85.5%, assurance was 85.8%, empathy was 76.3%, while the dimension of tangibles was 70.9%. In conclusion, patients were satisfied on an average, regarding the professional services provided by the staff of certified pharmacies in the region.

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Customer Satisfaction and Its Impact on the Future Costs of Selling

Cited by 65 publications

References 105 publications

Customer Satisfaction and Firm Profits in Monopolies: A Study of Utilities

Customer Satisfaction and Firm Profits in Monopolies: A Study of Utilities

CEOs’ Prosocial Behavior, Their Careers and Corporate Policies

Patients’ Level of Satisfaction from Pharmaceutical Services Provided by Private Pharmacies Using the SERVQUAL Model Analysis

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