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

Author

Listed:
  • 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)

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.

Suggested Citation

  • Vikas Mittal & Eugene W. Anderson & Akin Sayrak & Pandu Tadikamalla, 2005. "Dual Emphasis and the Long-Term Financial Impact of Customer Satisfaction," Marketing Science, INFORMS, vol. 24(4), pages 544-555, August.
    • Handle: RePEc:inm:ormksc:v:24:y:2005:i:4:p:544-555
    DOI: 10.1287/mksc.1050.0142
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