Customer Satisfaction

MIT Sloan Management Review on The High Price of Customer Satisfaction:

Customer satisfaction has become the most widely used metric in companies’ efforts to measure and manage customer loyalty. The assumption is simple and intuitive: Highly satisfied customers are good for business. However, the reality has not proven nearly so simple. In fact, we have found that if you look across industries at the correlation between companies’ customer-satisfaction levels for a given year and the corresponding stock performance of these companies for that same year, on average, satisfaction explains only 1% of the variation in a company’s market return.