Definitions of customer satisfaction and customer profitability serve as the point of departure. In the next step, hypotheses about causal links between the two concepts are formulated. This step focuses on an intermediate class of variables consisting of the customer's repurchase intentions and actual purchasing patterns.
2.2. Customer satisfaction.
Customer satisfaction is a mental state which results from the customer's comparison of.
a) expectations prior to a purchase with b) performance perceptions after a purchase. A customer may make such comparisons for each part of an offer (domain-specific satisfaction) or for the offer in total (global satisfaction). In the satisfaction literature, customer satisfaction usually refers to the latter type of outcome. Moreover, this mental state, which we view as a cognitive judgement, is conceived of as falling somewhere on a bipolar continuum bounded at the lower end by a low level of satisfaction (expectations exceed performance perceptions) and at the higher end by a high level of satisfaction.
(performance perceptions exceed expectations).
2.3 Customer profitability.
Customer profitability is a customer-level variable which refers to the revenues less the costs which one particular customer generates over a given period of time. As such, this variable refers to the supplier's value of having one particular customer, not the customer's value of having a particular supplier. Customer profitability appears in two temporal forms in marketing-related literature. First, it appears as a matter of historical record. In this sense, a customer profitability analysis is similar to the firm's profit and loss statement. The main difference is that a customer profitability analysis refers to one particular customer, whereas a.
profit and loss statement refers to all customers. A history-oriented customer.
profitability analysis can be made at several levels. A common point of departure is to calculate the contribution margin (gross contribution margin), i.
