Net promoter score, engagement, satisfaction. The list of customer metrics continues to grow, but which is the most indicative of a firm’s financial growth, and which is just a fad? Research by C-CUBES researchers points to a clear winner.
When strategic planning arrived on the scene in the mid-1960s, corporate leaders embraced it as “the one best way” to devise and implement strategies that would enhance the competitiveness of each business unit. True to the scientific management pioneered by Frederick Taylor, this one best way involved separating thinking from doing and creating a new function staffed by specialists: strategic planners. Planning systems were expected to produce the best strategies as well as step-by-step instructions for carrying out those strategies so that the doers, the managers of businesses, could not get them wrong. As we now know, planning has not exactly worked out that way.
Mintzberg, Henry. “The fall and rise of strategic planning.” Harvard business review 72, no. 1 (1994): 107-114.
Microsoft appears to be coping well with the “WannaCry” computer “ransomware”, even as the company’s president sharply criticized a U.S. spy agency for its role in exacerbating a weakness in Windows. This vulnerability allowed hackers to steal and utilize it in order to launch the largest “ransomware” attack in cyber history. Contrast to the aloof and distant approach employed by airlines, Microsoft has done well to support its customers under the tough circumstances. Not only did Microsoft proactively issue solutions for lapses in its current software, it even did so for software versions that were no longer being supported. Thus, when it comes to customer safety, Microsoft excelled.
Customer-Based Execution and Strategy (CUBES) is research collaborative that helps executives maximize the value of their most precious asset—the company’s customer base.
Collaborative for CUBES is a unique, data-driven approach to developing and executing strategy in a way that helps a company’s initiatives to fully align with customer needs. Using a proprietary survey of customers and state-of-the-art analytics, CUBES can help executives answer critical questions to develop and execute strategy:
- What are the financial outcomes—sales, margins, EBITDA, stock price—of satisfying customer needs?
- What key strategic priorities will differentiate you from competitors?
- Within the key strategic priorities, what execution levers should you pull?
CARLY FRENNEA AND VIKAS MITTAL
The authors synthesize research on the relationship between customer satisfaction (CS) and customer- and firm-level outcomes in a meta-analytic framework. Overall, the results point to positive associations between CS and customer behaviors, financial performance, and shareholder value. However, the magnitude of the relationship between CS and firm-level outcomes is smaller than that between CS and customer-level outcomes. Moderator analysis shows substantial variability in the effect sizes reported across customer-level studies, which can be partially attributed to contextual factors and measurement characteristics. The authors conclude with a discussion of the theoretical and managerial implications of these effects and propose future research directions. Although strength of the association with CS differs across customer behaviors, research has rarely examined multiple customer outcomes simultaneously. In addition, there is an opportunity to specify mechanisms that drive the differences in effect sizes across contexts. Finally, the results reveal that the still-emerging literature on the impact of CS on financial performance would benefit from a systematic investigation of moderators and the means through which CS affects firm performance.
Frennea, Carly and Mittal, Vikas, Customer Satisfaction, Loyalty Behaviors, and Firm-Financial Performance: What 30 Years of Research Tells Us (July 2, 2017).
In the last few quarters Buffet has sold a large portion of his stake in IBM, while amassing Apple. He’s right, and data from the Collaborative for Customer-Based Execution & Strategy™ supports his decision.
Rather than a fad, buying American is a consistent and persistent motivation for many consumers. But which consumers are more likely to buy American and why? How can companies better cater to this need among their current and potential customers? This note reviews how companies can proactively respond to consumers’ buy-American motivations and increase customer satisfaction, loyalty behaviors, and financial outcomes. Four distinct motivations drive people to buy American: country branding, country animosity, consumer ethnocentrism, and local identity. This note identifies specific scales that can be administered via a survey for implementing a buy-American branding strategy based on these four motivations. Specific examples illustrate how companies use these four pillars to support their buy-American branding strategy.
“As board members, we only meet infrequently and are not engaged with the front line,” confessed United Airlines CEO Oscar Munoz last year during the annual meeting in June. But this spring, when footage of passenger Dr. David Dao being dragged off a United plane swept the internet, it became clear the airline’s leadership needed to engage far better in situations with unhappy passengers. What, exactly, should United Airlines do? Recent research can help school the airline on how to improve.
Managers of brands big and small, local and international can leverage the nationalist sentiment swaying consumers’ purchases. Click here to read the full article published at American Marketing Association.
ROBERT A. PETERSON AND WILLIAM R. WILSON
Self-reports of customer satisfaction invariably possess distributions that are negatively skewed and exhibit a positivity bias. Examination of the customer satisfaction literature and empirical investigations reveal that measurements of customer satisfaction exhibit tendencies of confounding and methodological contamination and appear to reflect numerous artifacts. Implications and suggestions for research and practice are discussed.
Peterson, Robert A., and William R. Wilson (1992). “Measuring customer satisfaction: fact and artifact.” Journal of the Academy of Marketing Science 20 (1), 61.