Marketing Commons^™

Customer Satisfaction And Its Impact On The Future Costs Of Selling, Leon Gim Lim, Kapil R. Tuli, Rajdeep Grewal

Research Collection Lee Kong Chian School Of Business

Although scholars have established that customer satisfaction affects different dimensions of firm financial performance, a managerially important but overlooked aspect is its effect on a firm’s future cost of selling (COS), that is, expenditures associated with persuading customers and providing convenience to them. Accordingly, this study presents the first empirical and theoretical examination of the impact of customer satisfaction on future COS. The authors propose that while higher customer satisfaction can lower future COS, the degree to which a firm realizes this benefit depends on its strategy and operating environment. Analyzing almost two decades of data from 128 firms, the …