Relating customer satisfaction to customer profitability: an empirical analysis of the association between attitudes and behaviour

Abstract

This paper explores relationships between customer satisfactions; repurchase intentions, purchase behavior, and customer profitability with empirical data on attitudes, behavior, and profitability at the customer level of analysis. Purchase behavior and profitability data derived from the accounting system of a firm, are matched with the responses of the firm’s customers to survey questions distributed prior to the behavior and profitability outcomes. The analysis reveals a strong relationship between customer behavior and customer profitability, while modest links exist between repurchase intentions and subsequent behavior. Only a weak and non-significant direct link can be observed between customer satisfaction and customer profitability. This paper, then, questions customer satisfaction’s commonly assumed role as an agent for profitability.

KEYWORDS: Customer satisfaction; customer profitability; purchase behaviour; repurchase intensions; attitudes.