Jacobson and Mizik 2009
Vol. 28, No. 5, September–October 2009, pp. 809–818 issn 0732-2399 eissn 1526-548X 09 2805 0809
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doi 10.1287/mksc.1090.0495 © 2009 INFORMS
INFORMS holds copyright to this article and distributed this copy as a courtesy to the author(s). Additional information, including rights and permission policies, is available at http://journals.informs.org/.
The Financial Markets and Customer Satisfaction: Reexamining Possible Financial Market Mispricing of Customer Satisfaction
Robert Jacobson
Diogenes Consulting, Seattle, Washington 98109, bob.jacobson@diogenesconsulting.com
Natalie Mizik
Graduate School of Business, Columbia University, New York, New York 10027, nm2079@columbia.edu
W
e investigate the association between information contained in the American Customer Satisfaction Index (ACSI) metric and future stock market performance. Some past research has provided results suggesting that the financial markets misprice customer satisfaction; i.e., firms advantaged in customer satisfaction are posited to earn positive future-period abnormal stock returns. We reexamine this relationship and find that statistically significant evidence of financial market mispricing of customer satisfaction is limited to firms in the computer and Internet sector. The results suggest that the mispricing anomaly reported in past research appears not to stem from a systemic failure of the financial markets to impound the financial implications of customer satisfaction into current stock price, but rather from abnormal returns achieved by a small group of satisfaction leaders in the computer and Internet sector over the period of study. Analyses based on unconditional risk covariates and analyses using conditional risk covariates estimated from short-window, high-frequency data support this finding. Key words: marketing metrics; valuation; mispricing; customer satisfaction; financial performance; efficient markets History: Received: January 12, 2009; accepted: February
informs
®
doi 10.1287/mksc.1090.0495 © 2009 INFORMS
INFORMS holds copyright to this article and distributed this copy as a courtesy to the author(s). Additional information, including rights and permission policies, is available at http://journals.informs.org/.
The Financial Markets and Customer Satisfaction: Reexamining Possible Financial Market Mispricing of Customer Satisfaction
Robert Jacobson
Diogenes Consulting, Seattle, Washington 98109, bob.jacobson@diogenesconsulting.com
Natalie Mizik
Graduate School of Business, Columbia University, New York, New York 10027, nm2079@columbia.edu
W
e investigate the association between information contained in the American Customer Satisfaction Index (ACSI) metric and future stock market performance. Some past research has provided results suggesting that the financial markets misprice customer satisfaction; i.e., firms advantaged in customer satisfaction are posited to earn positive future-period abnormal stock returns. We reexamine this relationship and find that statistically significant evidence of financial market mispricing of customer satisfaction is limited to firms in the computer and Internet sector. The results suggest that the mispricing anomaly reported in past research appears not to stem from a systemic failure of the financial markets to impound the financial implications of customer satisfaction into current stock price, but rather from abnormal returns achieved by a small group of satisfaction leaders in the computer and Internet sector over the period of study. Analyses based on unconditional risk covariates and analyses using conditional risk covariates estimated from short-window, high-frequency data support this finding. Key words: marketing metrics; valuation; mispricing; customer satisfaction; financial performance; efficient markets History: Received: January 12, 2009; accepted: February
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