Bruce Cooil, Timothy L. Keiningham, Lerzan Aksoy, & Michael Hsu
Executive Summary
Customer loyalty is one of the most important strategic objectives of managers globally. Research has investigated the relationship between customer satisfaction and loyalty in various contexts. However, these predominantly cross-sectional studies have focused on customer retention as the primary measure of loyalty. The impact on share of wallet has been much less investigated.
Using data from the Canadian banking industry, this research aims to (1) provide the first longitudinal examination of the impact of changes in customer satisfaction on changes in share of wallet and (2) determine the moderating effects of customer age, income, education, expertise, and length (age) of relationship. Data from 4,319 households with 12,249 observations over a five-year period indicate a positive relationship between changes in satisfaction and share of wallet. In particular, the initial satisfaction level and the conditional percentile of change in satisfaction significantly correspond to changes in share of wallet. Two variables, income and length of the relationship, negatively moderate this relationship. Other demographic and situational characteristics have no impact.
Biography
Bruce Cooil is Associate Professor Of Management in the Owen Graduate School of Management at Vanderbilt University. His research interests include the adaptation of latent class models for marketing and medical research, qualitative data reliability, large sample estimation theory, and extreme value theory. Bruce’s research on latent-class and grade-of-membership models have appeared in Journal of Marketing Research and Psychometrika. This includes work with Roland Rust on reliability estimators for qualitative data that are now the standard for nominal and ordinal variables and are used widely in business and management, communication, applied psychology, and many other areas. With Sajeev Varki and Roland Rust, he received the Lehmann Award (2001) and was a finalist for the Green Award (2001). Overall, his peer-reviewed publications have appeared in more than 20 marketing, statistics, and medical journals and have received more than 1,000 citations.
Timothy L. Keiningham is Senior Vice President and Head Of Consulting at Ipsos Loyalty. He is author of several management books and numerous scientific papers. His most recent book, Loyalty Myths (with Vavra, Aksoy, and Wallard, 2005, John Wiley & Sons) addresses the fallacies of most of the conventional wisdom surrounding customer loyalty. Tim’s article “The Brand–Customer Connection,” (with Lerzan Aksoy, Tiffany Perkins-Munn, and Terry G. Vavra) was selected by Emerald Management Reviews as one of the top 50 management articles of 2005 from among 20,000 articles reviewed by the organization that year. He has won best paper awards from Journal of Marketing and Journal of Service Research. Another article was a finalist for best paper in Managing Service Quality. His articles have appeared in publications such as Journal of Marketing, Journal of Service Research, International Journal of Service Industry Management, Journal of Relationship Marketing, Interfaces, Marketing Management, Managing Service Quality, and Journal of Retail Banking. He serves on the advisory board of Journal of Relationship Marketing and on the editorial review boards of Journal of Marketing and Journal of Service Research.
Lerzan Aksoy is Assistant Professor of Marketing at Koç University in Istanbul, Turkey. She is coauthor of the book Loyalty Myths (with Keiningham, Vavra, and Wallard). Lerzan’s article “The Brand-Customer Connection,” (with Timothy L. Keiningham, Tiffany Perkins-Munn, and Terry G. Vavra) was selected by Emerald Management Reviews as one of the top 50 management articles of 2005 from among 20,000 articles reviewed by the organization that year. Her article “Does Customer Satisfaction Lead to Profitability? The Mediating Role of Share of Wallet” was a finalist for best paper in Managing Service Quality. Her articles have been accepted for publication in journals such as Journal of Marketing, Journal of Service Research, Journal of Relationship Marketing, International Journal of Service Industry Management, Managing Service Quality, and Marketing Management. She serves on the advisory board of Journal of Relationship Marketing and is an ad hoc reviewer for Journal of Marketing, Journal of Service Research, and Cornell HRA Quarterly. She holds a PhD from the University of North Carolina at Chapel Hill.
Michael Hsu is Associate Vice President at Ipsos Reid in Toronto, Canada. His research focus lies in consumer purchasing behavior; specifically, it is related to service quality and the underlying behavioral and demographic factors that influence the decision-making process. As part of his responsibilities for Ipsos Reid, he manages the Canadian Financial Monitor, which tracks the ongoing financial health and banking activities of Canadian households. He holds a degree in Business Administration from York University.
Journal of Marketing, Vol. 71, No. 1, January 2007
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