Scheduled for The Consortium of Research in HPERD and Social, Wednesday, April 10, 2002, 5:30 PM - 7:00 PM, San Diego Convention Center: Exhibit Hall


An Examination of the Link Between Customer Satisfaction and Profitability

T. Christopher Greenwell, University of Louisville, Louisville, KY, Janet S. Fink, The Ohio State University, Columbus, OH and Donna L. Pastore, Ohio State University, Dublin, OH

The financial benefits of attracting new customers is obvious to sport marketers, but the financial benefits of satisfying existing customers is quite often overlooked. This occurs despite the fact much of the marketing literature argues that customer satisfaction is the key predictor of profitability (Anderson, Fornell, & Lehmann, 1994; Heskett, Jones, Loveman, Sasser, & Schlesinger, 1994; Heskett, Sasser, & Schlessinger, 1997; Rust, Zahorik, & Keiningham, 1995). However, profitability from customer satisfaction is not revealed in the short term (Zeithaml, 2000) making it difficult for managers to appreciate the benefits of satisfying existing customers. This study attempts to link customer satisfaction with profitability in an effort to demonstrate to sport managers the benefits of satisfying existing customers. To estimate the financial implications of increased customer satisfaction, the conceptual approached defined by (Heskett et al., 1994) was used, which outlines profitability as a function of customer retention, related sales, and referrals. Specifically, satisfied customers are likely to increase their levels of purchase and buy other services and products (Reichheld & Sasser, 1990) and influence the organization’s ability to attract customers through word-of-mouth referrals (Rust, Zahorik, & Keiningham, 1995). In this study, 147 minor-league hockey spectators were surveyed, and respondents were asked to indicate their level of customer satisfaction, estimate the number of games they intended to attend next season, estimate how many other people they planned to refer, and estimate how much money they spent on souvenir merchandise, parking, and concessions. MANOVA was used to analyze whether these variables differed across two levels of customer satisfaction. Results of the MANOVA were significant [Wilks’ Lambda=.863, F (3,144)=7.630, p < .001], indicating the combined dependent variables varied across levels of customer satisfaction. Univariate analyses revealed that customers in the high level were significantly more likely to attend more games than those in the low level [F (1,148)=22.370, p < .001] but did not reveal differences in terms of related sales [F (1,148)=.383, p=.537] or the number of referrals [F (1,148)=6.184, p=.722]. Results indicate highly satisfied customers did not intend to refer more customers or spend more on related items than less satisfied customers. Satisfied customers, however, were likely to intend to attend more games in the future, implying that an investment in programs or procedures designed to satisfy customers have the potential to pay off in the long term.
Keyword(s): sport management

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