Investigating the Strategic Influence of Customer and Employee Satisfaction on Firm Financial Performance

Dotson, Jeffrey P.; Allenby, Greg M.
September 2010
Marketing Science;Sep/Oct2010, Vol. 29 Issue 5, p895
Academic Journal
The ability to demonstrate the impact of marketing action on firm financial performance is crucial for evaluating, justifying, and optimizing the expenditure of a firm's marketing resources. This presents itself as a formidable task when one considers both the variety and potential influence of marketing activity. We propose a hierarchical Bayesian model of simultaneous supply and demand that allows us to formally study the financial impact of a variety of marketing activities, including those that operate on different timescales. The supply-side model provides insight into how the firm allocates resources across its various subunits. We illustrate our approach in a services context by integrating data from three independent studies conducted by a large national bank. Our model allows customer and employee satisfaction to influence firm profitability by moderating the conditional relationship between the bank's operational inputs and its proclivity to produce revenue.


Related Articles

  • Munis Quiet as Yields Drift Slightly Higher. Riggs, Taylor // Bond Buyer;6/5/2012, Vol. 380 Issue 33725, p2 

    The article presents information on the financial performance of the municipal bond market. Activity on the market was muted and traders said the market was struggling to get going. It is stated that five-year muni yield to Treasury yield ratio was the anomaly, as it increased slightly to 118.5...

  • THE DETERMINANTS OF RETURN ON EQUITY: EVIDENCES FROM SRI LANKAN MICROFINANCE INSTITUTIONS. Dissanayake, D. M. N. S. W. // Researchers World: Journal of Arts, Science & Commerce;Apr2012, Vol. 3 Issue 2, p26 

    Particularly, this study was carried out to ascertain the significant determinants of Return on Equity in Sri Lankan Microfinance Institutions (hereafter MFIs). Within the period of 2005-2011 the researcher evaluated 11 MFIs exists in Sri Lanka. Under this study, efficiency and productivity are...

  • Diversification Effect: Isolating the Effect of Correlation on Portfolio Risk. Hight, Gregory N. // Journal of Financial Planning;May2010, Vol. 23 Issue 5, p54 

    The article discusses the implication of diversification effect (DE) in portfolio risk. It explains that DE is considered as a reduction in portfolio risk which is a result of imperfect correlations between asset return pairs. It states that DE is essential in dealing with correlations that are...

  • The Moderating Role of Competition in the Relationship between Nonfinancial Measures and Future Financial Performance. BANKER, RAJIV D.; MASHRUWALA, RAJ // Contemporary Accounting Research;Fall2007, Vol. 24 Issue 3, p763 

    The mixed results from earlier studies examining the links between nonfinancial measures and financial performance suggest that contextual variables may moderate these relationships. We use data from more than 800 stores of a retail chain to assess whether the relationship between nonfinancial...

  • Stability Control in a Supply Chain: Total Costs and Bullwhip Effect Reduction. Strozzi, Fernanda; Noè, Carlo; Zaldívar, José-Manuel // Open Operational Research Journal;2008, p51 

    The bullwhip effect refers to the phenomenon of demand distortion in a supply chain. By eliminating or controlling this effect, it is possible to increase product profitability. The main focus of this work is to apply a control technique, based on the divergence of system, to reduce the bullwhip...

  • The ROI of F&I. Ammons, C. B. // Motorcycle Product News;Apr2011, Vol. 37 Issue 4, p10 

    The article offers tips on how to assess the commitment of motorcycle dealers to finance and insurance (F&I) profitability. It advises dealers to determine how much they spend on special tooling and technical training in the service department and on annual training for the F&I department. It...

  • Le rôle du pouvoir discrétionnaire du dirigeant dans l'amélioration de la performance : Cas des entreprises tunisiennes. Khanchel, Imen // Revue des Sciences de Gestion;mai-aoû2009, Issue 237/238, p95 

    In this paper, we examine whether managerial discretion affect firm performance. Results of this study of a sample of 78 Tunisian firms show a strong relationship between managerial discretion and return on assets. This result can be explained by the presence of large shareholders who are, in...

  • Equity Portfolios and Activeness - Are you using the right metrics? Chandgothia, Binay // Asia Insurance Review;Mar2009, p86 

    The article examines some of the aspects of merits of commonly used measures of the active return on an investment. One of these aspects refers to high tracking error which is being synonymous with high potential outperformance. Other aspect is the number of stocks in a portfolio as the most...

  • Pressing the return.  // Director;May2006, Vol. 59 Issue 10, p37 

    Focuses on the measurement of return from information technology (IT) investments. Benefits from implementing IT systems; Factors that should be considered in measuring return on investment; Computation of return on investment.


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics