Marketing science has long been concerned with the question of the extent to which customer satisfaction leads to customer retention and, subsequently, to a positive effect on profits. Most of the behaviour-driven explanations posit a generally positive relationship between the two. However, this generality has not been confirmed in empirical investigations. In this paper, the relationship between customer satisfaction and customer retention is analysed from an economic perspective. The overall aim is to identify relevant factors that influence the effect of satisfaction on the retention of clients. Based on considerations derived from economics of information theory, it is revealed that apart from the speed of technological progress, the possibility of assessing product quality is a significant driver for customer satisfaction as a source of retention.
Get full access to this article
View all access options for this article.
References
1.
Albert, H. (1991) Traktat über kritische Vernunft, 5th edn. Tübingen: Mohr .
2.
Auh, S. and Johnson, M.D. (1997) `The complex Relationship between Customer Satisfaction and Loyalty for Automobiles', in M.D. Johnsonet al. (eds) Customer Retention in the Automotive Industry: Quality, Satisfaction, and Loyalty, pp. 141-166. Wiesbaden: Gabler .
3.
Bearden, W.O. and Teel, J.E. (1983) `Selected Determinants of Consumer Satisfaction and Complaint Reports' , Journal of Marketing Research20: 21-28 .
4.
Blau, P. (1964) Exchange and Power in Social Life. New York: Wiley & Sons .
5.
Churchill, G.A. and Suprenant, C. (1982) `An Investigation into the Determinants of Customer Satisfaction' , Journal of Marketing Research19: 491-504 .
6.
Cox, D.F. (1967) Risk Taking and Information Handling in Consumer Behavior. Boston, MA: Harvard Press .
7.
Darby, M.R. and Karni, E. (1973) `Free Competition and the Optimal Amount of Fraud' , Journal of Law and Economics16: 67-88 .
8.
Fornell, C. (1992) `A National Customer Satisfaction Barometer: The Swedish Experience' , Journal of Marketing56: 6-21 .
9.
Fornell, C. (1995) `The Quality of Economic Output: Empirical Generalizations about its Distribution and Relationship to Market Share' , Marketing Science14: G203-G211 .
10.
Fornell, C., Johnson, M.D., Anderson, E.W., Cha, J. and Everett Bryant, B. (1996) `The American Customer Satisfaction Index: Nature, Purpose, and Findings' , Journal of Marketing60: 7-18 .
11.
Grönroos, C. (1996) `The rise and fall of modern marketing - and its rebirth', in S.A. Shaw and N. Hood (eds) Marketing in Evolution: Essays in Honour of Michael J. Baker, pp. 14-35. London: Macmillan Press .
12.
Gümbel, R. and Stadler, D. (1988) `Absatztheorie und Theorie der Verfügungsrechte', in D. Budäus, E. Gerum and G. Zimmermann (eds) Betriebswirtschaftslehre und Theorie der Verfügungsrechte, pp. 173-195. Wiesbaden: Gabler .
13.
Gummesson, E. (1999) Total Relationship Marketing. Oxford: Butterworth-Heinemann .
14.
Herrmann, A. and Johnson, M.D. (1999) `Die Kundenzufriedenheit als Bestimmungsfaktor der Kundenbindung' , Zeitschrift für betriebswirtschaftliche Forschung51: 579-598 .
15.
Homans, G.C. (1961) Social Behavior: Its Elementary Forms. New York: Harcourt .
16.
Homburg, C. (1998) Kundennähe in Industriegüterunternehmen, Konzeption - Erfolgsauswirkungen - Determinanten, 2nd edn. Wiesbaden: Gabler .
17.
Homburg, C. and Rudolph, B. (1998) `Theoretische Perspektiven zur Kundenzufriedenheit', in H. Simon and C. Homburg (eds) Kundenzufriedenheit. Konzepte - Methoden - Erfahrungen, 3rd edn, pp. 33-59. Wiesbaden: Gabler .
18.
Howard, J.A. (1965) Marketing Theory. Boston, MA: Allyn and Bacon .
19.
Ikeda, S. (1994) `Market Process', in P.J. Boettke (ed.) The Elgar Companion to Austrian Economics, pp. 23-29. Aldershot: Edward Elgar .
20.
Jacoby, J. and Chestnut, R.W. (1978) Brand Loyalty Measurement and Management. New York: Wiley & Sons .
21.
Jöreskog, K.G. and Sörbom, D. (1988) PRELIS - A Program for Multivariate Data Screening and Data Summerization. Mooresville: Scientific Software .
22.
Johnson, M.P. (1982) `Social and Cognitive Features of the Dissolution of Commitment to Relationships', in S. Duck (ed.) Personal Relationships, pp. 51-73. London: Academic Press .
23.
Johnson, M.D. (1997) `Achieving Customer Satisfaction, Loyalty, and Retention through Strategic Allignment', in M.D. Johnsonet al. (eds) Customer Retention in the Automotive Industry: Quality, Satisfaction, and Loyalty, pp. 117-140. Wiesbaden: Gabler .
24.
Kaas, K.P. (1990) `Marketing als Bewältigung von Informations- und Unsicherheitsproblemen im Markt' , Die Betriebswirtschaft50(4): 539-548 .
25.
Kaas, K.P. (1991) `Marktinformationen: Screening und Signaling unter Partnern und Rivalen' , Zeitschrift für Betriebswirtschaft, 61(3): 357-370 .
26.
Kaas, K.P. (1992) `Kontraktgütermarketing als Kooperation zwischen Prinzipalen und Agenten' , Zeitschrift für betriebswirtschaftliche Forschung, 44(10): 884-901 .
27.
Kaas, K.P. (1995) `Informationsökonomik', in B. Tietz (ed.) Enzyklopädie der Betriebswirtschaftslehre, 2nd edn, pp. 971-981. Bd. 4, Handwörterbuch des Marketing, Stuttgart: Schäffer-Poeschel .
28.
Kirzner, I. M. (1973) Competition and Entrepreneurship. Chicago, IL: University of Chicago Press .
29.
Kirzner, I. M. (1988) Unternehmer und Marktdynamik. Munich: Philosophia Verlag .
30.
Kirzner, I. M. (1997) How Markets Work: Disequilibrium, Entrepreneurship and Discovery, Hobart Paper. London: The Institute of Economic Affairs .
31.
Kleinaltenkamp, Fließ, S. and Jacob, F. (1996) Customer Integration - Von der Kundenorientierung zur Kundenintegration. Wiesbaden: Gabler .
32.
Nelson, P. (1970) `Information and Consumer Behavior' , The Journal of Political Economy78(2): 311-329 .
33.
Nelson, P. (1974) `Advertising as Information' , Journal of Political Economy82(4): 729-754 .
34.
Oliver, R.L. (1980) `A Cognitive Model of the Antecedents and Consequences of Satisfaction Decisions' , Journal of Marketing Research17: 460-469 .
35.
Oliver, R.L. and DeSarbo, W. (1988) `Response Determinants in Satisfaction Judgements' , Journal of Consumer Research14: 495-507 .
36.
Plinke, W. (1989) `Die Geschäftsbeziehung als Investition', in G. Specht, G. Silberer and W.H. Engelhardt (eds) Marketing-Schnittstellen, Herausforderungen für das Management, pp. 305-325. Stuttgart: Schäffer-Poeschel .
37.
Plinke, W. (1997) `Grundlagen des Geschäftsbeziehungsmanagements', in M. Kleinaltenkamp and W. Plinke (eds) Geschäftsbeziehungsmanagement, pp. 1-62. Berlin: Springer .
38.
Popper, K.R. (1959) The Logic of Scientific Discovery. New York: Basic Books .
39.
Reichheld, F.F. (1996) `Learning from Customer Defections' , Harvard Business Review74: 56-69 .
40.
Schütze, R. (1992) Kundenzufriedenheit. Wiesbaden: Gabler .
41.
Sheth, J.N. and Parvatiyar, A. (1995) `Relationship Marketing in Consumer Markets: Antecedents and Consequences' , Journal of the Academy of Marketing Science23: 255-271 .
Thibaut, J.W. and Kelley, H.H. (1959) The Social Psychology of Groups. New York: Wiley .
44.
Weiber, R. (1997) `Das Management von Geschäftsbeziehungen im Systemgeschäft', in M. Kleinaltenkamp and W. Plinke (eds) Geschäftsbeziehungsmanagement, pp. 277-349. Berlin: Springer .
45.
Weiber, R. and Adler, J. (1995) `Informationsökonomisch begründete Typologie von Kaufprozessen' , Zeitschrift für betriebswirtschaftliche Forschung47(1): 43-65 .
46.
Westbrook, R.A. and Oliver, R. (1991) `The Dimensionality of Consumption Emotion Patterns and Consumer Satisfaction' , Journal of Consumer Research18: 84-91 .
47.
Williamson, O.E. (1981) `The Modern Corporation: Origin - Evolution - Attributes' , Journal of Economic Literature90: 1537-1568 .
48.
Williamson, O.E. (1985) The Economic Institutions of Capitalism. New York: The Free Press .
49.
Williamson, O.E. (1990) `Transaction Cost Economics', in R. Schmalensee and R.D. Willig (eds) Handbook of Industrial Organization, Vol. 1, pp. 135-182. New York: Elsevier .
