Dual Emphasis and the Long-Term Financial Impact of Customer Satisfaction

Vikas Mittal (), Eugene W. Anderson (), Akin Sayrak () and Pandu Tadikamalla ()
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Vikas Mittal: University of Pittsburgh, 360 Mervis Hall, Pittsburgh, Pennsylvania 15260
Eugene W. Anderson: University of Michigan, 701 Tappan Street, Ann Arbor, Michigan
Akin Sayrak: University of Pittsburgh, 364 Mervis Hall, Pittsburgh, Pennsylvania 15260
Pandu Tadikamalla: University of Pittsburgh, 258 Mervis Hall, Pittsburgh, Pennsylvania 15260

Marketing Science, 2005, vol. 24, issue 4, 544-555

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. (October) 7–24.) to examine the association between customer satisfaction and long-term financial performance among firms that 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 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 a dual emphasis is desirable for long-run financial success, the 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.

Keywords: customer satisfaction; services marketing; marketing strategy and metrics (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (64)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:24:y:2005:i:4:p:544-555

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