Customer Satisfaction and Revenue: Exploring Variations by Satisfaction Level and Revenue Contribution

Kent Eriksson (), Cecilia Hermansson () and Carin Segerlind ()
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Kent Eriksson: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Teknikringen 10B, 100 44 Stockholm, Sweden
Cecilia Hermansson: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Teknikringen 10B, 100 44 Stockholm, Sweden
Carin Segerlind: Swedbank, Postal: Stockholm, Sweden

No 25/1, Working Paper Series from Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance

Abstract: Customer satisfaction research is widely recognized as one of the most utilized key performance indicators in marketing theory and practice. Extensive research underscores its positive correlation with revenue generation. This study empirically examines the relationship between customer satisfaction and changes in customer revenue at the individual customer level. Using a dataset comprising of 19,054 bank customers, the findings reveal a significant relationship between the customer satisfaction index (CSI) and revenue changes. Notably, the analysis demonstrates that this relationship is not strictly linear. Customers with satisfaction levels between 80 and 89 exhibit greater revenue changes compared to those with CSI levels of 90-100. These findings challenge the notion of customer satisfaction as a universal marketing tool for revenue generation. They suggest that satisfaction initiatives are most effective among already satisfied customers contributing to substantial revenue growth, except for those with the highest CSI scores. For customers with exceptionally high satisfaction levels, alternative marketing strategies may be required to optimize revenue generation.

Keywords: Customer satisfaction; customer revenue; linear relationship (search for similar items in EconPapers)
JEL-codes: D10 D14 G21 M21 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2025-01-13
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