Measuring the effects of satisfaction: Linking customers, employees, and firm financial performance

Firms are most successful when they are able to efficiently satisfy the wants and needs of their clientele. As such, customer satisfaction has emerged as one of the more ubiquitous and oft studied constructs in marketing. Central to the study of satisfaction is the desire to understand its antecedents and outcomes. Managers would ultimately like to know how their actions will impact the satisfaction of their consumer base and, by extension, the company's financial performance. Through two essays, this dissertation develops quantitative models that allow for formal study of the relationship between customer satisfaction, employee satisfaction, and firm financial performance. The proposed models are designed to accommodate a variety of challenges often encountered in satisfaction studies including simultaneity, linkage of distributions, and the fusion of multiple data sets. The benefits of these models are demonstrated empirically using data from a national financial services firm.