Understanding the link between customer feedback metrics and firm performance

Gomaa Agag; Baseer Ali Durrani; Yasser Moustafa Shehawy; Majed Alharthi; Hawazen Alamoudi; Sherif El-Halaby; Ahmed Hassanein; Ziad H. Abdelmoety

doi:10.1016/j.jretconser.2023.103301

Understanding the link between customer feedback metrics and firm performance

Gomaa Agag (Lead / Corresponding author), Baseer Ali Durrani, Yasser Moustafa Shehawy, Majed Alharthi, Hawazen Alamoudi, Sherif El-Halaby, Ahmed Hassanein, Ziad H. Abdelmoety

University of Dundee School of Business

Research output: Contribution to journal › Article › peer-review

Abstract

Practitioners utilise customer feedback metrics (CFM's) to monitor business performance. However, the influence of CFM's on firm performance has been ignored. Thus, this paper aims to examine the effects of CFM's on firm performance. Our study collected data about CFM's, marketing efforts, and financial performance over the period 2005–2020 from American Customer Satisfaction Index. The present study used a multiple regression panel analysis to investigate the influence of different CFMs (i.e., SAT, Top-2-Box, NPS proportion, NPS value, and CES) on firm performance (i.e., gross margin, sales growth, and Tobin's Q), moderating by operating environment factors (i.e., munificence, power, and dynamism). Our results revealed that Top-2-box is the best predictor CFM's to compare firms in online booking, hotels, and online shopping industries, while consumer satisfaction is the best predictor for electronic and fixed telecom industries. CES is the best CFM's to compare companies in restaurants industries. Moreover, NPS is the best metric to compare different companies in holiday parks industries. The results provide considerable managerial implications for effective use of resources regarding investing in most suitable CFM's to enhance firm performance.

Original language	English
Article number	103301
Number of pages	16
Journal	Journal of Retailing and Consumer Services
Volume	73
Early online date	5 Mar 2023
DOIs	https://doi.org/10.1016/j.jretconser.2023.103301
Publication status	E-pub ahead of print - 5 Mar 2023

Keywords

Consumer feedback metrics
Net promoter scores
Consumer satisfaction
Customer effort score
Marketing efforts
Financial performance

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Final Published VersionFinal published version, 1.33 MBLicence: CC BY

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title = "Understanding the link between customer feedback metrics and firm performance",

abstract = "Practitioners utilise customer feedback metrics (CFM's) to monitor business performance. However, the influence of CFM's on firm performance has been ignored. Thus, this paper aims to examine the effects of CFM's on firm performance. Our study collected data about CFM's, marketing efforts, and financial performance over the period 2005–2020 from American Customer Satisfaction Index. The present study used a multiple regression panel analysis to investigate the influence of different CFMs (i.e., SAT, Top-2-Box, NPS proportion, NPS value, and CES) on firm performance (i.e., gross margin, sales growth, and Tobin's Q), moderating by operating environment factors (i.e., munificence, power, and dynamism). Our results revealed that Top-2-box is the best predictor CFM's to compare firms in online booking, hotels, and online shopping industries, while consumer satisfaction is the best predictor for electronic and fixed telecom industries. CES is the best CFM's to compare companies in restaurants industries. Moreover, NPS is the best metric to compare different companies in holiday parks industries. The results provide considerable managerial implications for effective use of resources regarding investing in most suitable CFM's to enhance firm performance.",

keywords = "Consumer feedback metrics, Net promoter scores, Consumer satisfaction, Customer effort score, Marketing efforts, Financial performance",

author = "Gomaa Agag and Durrani, {Baseer Ali} and Shehawy, {Yasser Moustafa} and Majed Alharthi and Hawazen Alamoudi and Sherif El-Halaby and Ahmed Hassanein and Abdelmoety, {Ziad H.}",

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AU - Durrani, Baseer Ali

AU - Shehawy, Yasser Moustafa

AU - Alharthi, Majed

AU - Alamoudi, Hawazen

AU - El-Halaby, Sherif

AU - Hassanein, Ahmed

AU - Abdelmoety, Ziad H.

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KW - Marketing efforts

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Understanding the link between customer feedback metrics and firm performance

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Keywords

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