Erwin Schrödinger Fellowship J 1924 Customer Value and Shareholder Value Kurt MATZLER 26.6.2000
Customer Value and Shareholder Value
Customer satisfaction and customer value are of fundamental importance to companies. It is widely
accepted that delivering products and services of high quality leads to customer satisfaction and in turn to
higher profits. In order to improve their competitive position many companies use some form of customer
satisfaction measurement in developing, monitoring and evaluating their products and services, formulate
strategies to enhance satisfaction, and compensate employees based on satisfaction ratings. On the
other side, more and more companies are replacing their usual yardstick of performance with approaches
that judges market strategies by their ability to enhance shareholders` value. It is argued that a company`s
primary obligation is to maximize the returns from capital appreciation and dividends earned by holders of
common shares. The objective of this research project is to analyze the relationship between customer
value and shareholder value. In order to do that a theoretical model will be developed and tested
empirically. It is based on the assumption that customer value has direct behavioral consequences such
as loyalty, cross-selling, decreased price sensitivity and positive word-of-mouth. These behavioral
consequences in turn have economic consequences that directly effect drivers of shareholder value. In
addition to the strength of the relationship between customer value and shareholder value its form will be
analyzed. Based on empirical findings about a nonlinear relationship between customer satisfaction and
behavioral consequences the author will analyze a non linear relationship between customer value and
shareholder value.