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

Vikas Mittal, Eugene W. Anderson, Akin Sayrak, & Pandu Tadikamalla. (2005). "Dual Emphasis and the Long-Term Financial Impact of Customer Satisfaction". Marketing Science, 24(4), Fall 2005, 544-555

12 Pages Posted: 25 Oct 2013

See all articles by Vikas Mittal

Vikas Mittal

Rice University

Eugene Anderson

University of Michigan at Ann Arbor

Akin Sayrak

University of Pittsburgh

Pandu R. Tadikamalla

University of Pittsburgh - Operations, Decision Sciences, and Artificial Intelligence Group

Date Written: 2005

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. J. Marketing 66 (October) 7-24.) to examine the association between customer satisfaction and long-term financial performance among firms that achieve 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 achieve 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 achieving a dual emphasis is desirable for long-run financial success, the process of achieving 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.

Keywords: customer satisfaction; services marketing; marketing strategy and metrics

Suggested Citation

Mittal, Vikas and Anderson, Eugene and Sayrak, Akin and Tadikamalla, Pandu R., Dual Emphasis and the Long-Term Financial Impact of Customer Satisfaction (2005). Vikas Mittal, Eugene W. Anderson, Akin Sayrak, & Pandu Tadikamalla. (2005). "Dual Emphasis and the Long-Term Financial Impact of Customer Satisfaction". Marketing Science, 24(4), Fall 2005, 544-555, Available at SSRN: https://ssrn.com/abstract=2343781

Vikas Mittal (Contact Author)

Rice University ( email )

6100 South Main Street
250 McNair
Houston, TX 77005-1892
United States

Eugene Anderson

University of Michigan at Ann Arbor ( email )

500 S. State Street
Ann Arbor, MI 48109
United States

Akin Sayrak

University of Pittsburgh ( email )

341 Mervis Hall
Katz School of Business
Pittsburgh, PA 15260
United States
412-512-5720 (Phone)
(412) 253-6005 (Fax)

Pandu R. Tadikamalla

University of Pittsburgh - Operations, Decision Sciences, and Artificial Intelligence Group ( email )

United States

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