Customer Satisfaction, Competition, and Firm Performance: An Empirical Investigation

We conduct two empirical studies to test two hypotheses: (1) rivals' customer satisfaction increases a firm's own customer satisfaction; and (2) rivals' customer satisfaction reduces a firm's sales. Study One uses a panel dataset of annual store-level customer satisfaction data from a supermarket chain for the periods 1998-2001. Study Two considers a range of industries by using a panel dataset of brand-level customer satisfaction ratings from the American Customer Satisfaction Index spanning the periods 1994-2003. Results from both studies provide support for our hypotheses. Copyright (C) 2013 John Wiley & Sons, Ltd.