Strengthening the Satisfaction-Profit Chain

Abstract

Customer satisfaction programs do not always deliver anticipated results. Disenchanted, some have labeled satisfaction measurement a “trap” and argued for abandoning customer satisfaction as a means for optimizing customer retention and profitability. The authors argue that doing so may be a mistake because the satisfaction-profit chain is conceptually solid. However, to achieve results, an important step is to recognize that the links in the satisfaction-profit chain are asymmetric and nonlinear. In this article, the authors review recent developments pertaining to the asymmetric and nonlinear nature of the links involved. They also discuss several examples based on commercial satisfaction studies where incorporating the asymmetry and nonlinearity added significant value to the firm’s understanding of the satisfaction-profit chain.