Investigating the Strategic Influence of Customer and Employee Satisfaction on Firm Financial Performance

Jeffrey P. Dotson () and Greg M. Allenby ()
Additional contact information
Jeffrey P. Dotson: Owen Graduate School of Management, Vanderbilt University, Nashville, Tennessee 37203
Greg M. Allenby: Fisher College of Business, Ohio State University, Columbus, Ohio 43210

Marketing Science, 2010, vol. 29, issue 5, 895-908

Abstract: The ability to demonstrate the impact of marketing action on firm financial performance is crucial for evaluating, justifying, and optimizing the expenditure of a firm's marketing resources. This presents itself as a formidable task when one considers both the variety and potential influence of marketing activity. We propose a hierarchical Bayesian model of simultaneous supply and demand that allows us to formally study the financial impact of a variety of marketing activities, including those that operate on different timescales. The supply-side model provides insight into how the firm allocates resources across its various subunits. We illustrate our approach in a services context by integrating data from three independent studies conducted by a large national bank. Our model allows customer and employee satisfaction to influence firm profitability by moderating the conditional relationship between the bank's operational inputs and its proclivity to produce revenue.

Keywords: customer satisfaction; employee satisfaction; endogeneity; resource allocation (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://dx.doi.org/10.1287/mksc.1100.0584 (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:29:y:2010:i:5:p:895-908

Access Statistics for this article

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