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Customer Satisfaction and Links to Customer Profitability: An Empirical Examination of the Association between Attitudes and Behavior

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Author Info

  • Söderlund, Magnus

    ()
    (Dept. of Business Administration, Stockholm School of Economics)

  • Vilgon, Mats

    ()
    (Dept. of Business Administration, Stockholm School of Economics)

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    Abstract

    This paper explores links between customer satisfaction, repurchase intentions, purchase behavior, and customer profitability with empirical data on attitudes, behavior, and profitability at the customer level of analysis. Purchase behavior and profitability data, derived from the accounting system of a firm, are matched with the responses of the firm's customers to survey questions distributed prior to the behavior and profitability outcomes. The analysis reveals a strong link between customer behavior and customer profitability, while modest links exist between repurchase intentions and subsequent behavior. Only a weak and non-significant direct link can be observed between customer satisfaction and customer profitability. This paper, then, questions customer satisfaction's commonly assumed role as a proxy for profitability.

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    Bibliographic Info

    Paper provided by Stockholm School of Economics in its series Working Paper Series in Business Administration with number 1999:1.

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    Length: 22 pages
    Date of creation: 15 Jan 1999
    Date of revision:
    Handle: RePEc:hhb:hastba:1999_001

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    Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, SE 113 83 Stockholm, Sweden
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    Related research

    Keywords: Customer satisfaction; customer profitability;

    This paper has been announced in the following NEP Reports:

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