The Satisfaction, Repurchase Intention and Shareholder Value Linkage: A Longitudinal Examination of Fixed and Firm Specific Effects.

For virtually all firms, the means of generating shareholder value comes by having customers consistently come back. The measurement of customer satisfaction and repurchase intention is therefore critical to managers and researchers. Unfortunately, recent research studying the effect that 1) satisfaction and 2) repurchase intention have on shareholder value demonstrates inconsistent results. Using multi-source data across 137 firms over the 2000-2009 period, this study examines the impact of customer satisfaction and repurchase intention on a comprehensive list of 13 different shareholder value measures.We use a mixed-effects modeling approach that accounts for time-effects, firm characteristics and unobserved heterogeneity. Our results indicate that repurchase intention completely mediates the relationship between customer satisfaction and shareholder value for the majority of firms, lending support to the idea that the primary path from satisfaction to business outcomes is through customer purchase behavior, and not through other loyalty-related behaviors often attributed to highly satisfied customers.