Column 9 · Satisfaction and Loyalty · Era 5, Assets and Accountability (2000s)
Satisfaction and Firm Value
Outputs: performance · Landmark · Cluster IV, Customer and Brand Assets
Description
Anderson, Fornell, and Mazvancheryl showed that customer satisfaction is associated with shareholder value measured by Tobin's q, and Fornell et al. showed that portfolios of high-satisfaction firms earn excess stock returns at lower risk.
Managerial Implications
Customer satisfaction predicts shareholder value, through higher cash flows and lower risk, and portfolios of high-satisfaction firms have outperformed the market. This gives managers a financial argument for satisfaction investment and a warning: satisfaction declines foreshadow financial declines. Report satisfaction alongside financial metrics, understand the lag between the two in your business, and treat satisfaction as a leading indicator in planning.