An examination of relative satisfaction and share of wallet: investigating the impact of country and customer characteristics

Abstract

Purpose Absolute satisfaction ratings are widely used, but demonstrate a poor link to share of wallet, in part because this relationship is mediated and/or moderated by customer characteristics (including total spend in the category) and heterogeneity of scale usage. Relative satisfaction metrics, such as the Wallet Allocation Rule, have been shown to produce a much stronger link to share of wallet than absolute monadic ratings. This study compares absolute and relative satisfaction models after controlling for these mediating and moderating factors and re-examines the impact of these factors when using relative, rather than absolute metrics. Design/methodology/approach 3,793 satisfaction ratings by 1,172 unique grocery customers across 5 countries (US, Brazil, Chile, France & Germany) are used to evaluate the mediating and moderating impacts of scale usage and customer characteristics on the relationship between satisfaction and share of wallet. Findings Relative metrics continue to significantly outperform absolute metrics after controlling for these factors. With the exception of the moderating influence of income, effects of customer characteristics and country differences are insignificant when linking relative satisfaction to share of wallet. Practical implications Managers need to re-evaluate their satisfaction measurement strategy in order to establish a strong link to actual behavior. While calculating relative satisfaction requires managers to collect data on competitors as well as the focal brand, this need for additional information is mitigated by a trade-off in terms of mediating and moderating information that is essential to properly model absolute metrics, but is not needed when using relative measures. Originality/value Provides a significant contribution to both retail literature and scientific literature in general by examining the robustness of a relative metrics approach within the grocery retail sector across a disparate collection of countries.