Customer Metrics and Their Impact on Financial Performance

Sunil Gupta () and Valarie Zeithaml ()
Additional contact information
Sunil Gupta: Harvard Business School, 179 Morgan, Soldiers Field, Boston, Massachusetts 02163
Valarie Zeithaml: Kenan-Flagler School of Business, University of North Carolina at Chapel Hill, 4207 McColl, North Carolina 27599

Marketing Science, 2006, vol. 25, issue 6, 718-739

Abstract: The need to understand the relationships among customer metrics and profitability has never been more critical. These relationships are pivotal to tracking and justifying firms' marketing expenditures, which have come under increasing pressure. The objective of this paper is to integrate existing knowledge and research about the impact of customer metrics on firms' financial performance. We investigate both unobservable or perceptual customer metrics (e.g., customer satisfaction) and observable or behavioral metrics (e.g., customer retention and lifetime value). We begin with an overview of unobservable and observable metrics, showing how they have been measured and modeled in research. We next offer nine empirical generalizations about the linkages between perceptual and behavioral metrics and their impact on financial performance. We conclude the paper with future research challenges.

Keywords: customer satisfaction; service quality; customer lifetime value; customer retention; customer equity; profitability; firm value (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (193)

Downloads: (external link)
http://dx.doi.org/10.1287/mksc.1060.0221 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:25:y:2006:i:6:p:718-739

Access Statistics for this article

More articles in Marketing Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().