Linking Customer And Employee Satisfaction To Financial Performance

Derek R. Allen
Market Probe Europe



THE CUSTOMER SATISFACTION PROFIT LINK

It should come as no surprise that very few companies even consider the relationship between customer satisfaction and profitability. Establishing an empirical link between customer satisfaction and key business outcomes like profitability or market share assumes that a number of criteria are met. Of greatest concern is the organization's maturity. Companies with relatively unsophisticated or very new customer satisfaction programs are not likely to pursue the types of analysis described in this paper.

The desire to link customer satisfaction to important business indicators is a very salient topic in many organizations today. More and more often, managers of quality programs are being called upon to demonstrate the bottom line financial impact of their programs. Keiningham and Zahorik (1995, 7) suggested that since 1991 there has been 'an explosion of interest' in linking customer satisfaction to important business performance indicators.