Dual emphasis and the long-term financial impact of customer satisfaction

This paper draws on the quality profitability emphasis framework of Rust, Moorman, and Dickson to examine the association between customer satisfaction and long-term financial performance among firms that achieve a dual emphasis (focusing on both revenue-expansion and cost-reduction simultaneously, rather than solely emphasizing one over the other). Using a longitudinal data set of 77 firms from the United States, we test this hypothesis and find that the association between customer satisfaction and long-term financial performance is positive and relatively stronger for firms that successfully achieve a dual emphasis. We build on the work of Rust, Moorman, and Dickson, who investigated the financial impact of engaging in the process of achieving a dual emphasis. Collectively, these studies show that while achieving a dual emphasis is desirable for long-run financial success, the process of achieving a dual emphasis may not be as financially rewarding in the short-run. Firms pursuing a dual emphasis need to consider both short- and long-term consequences of their strategy.