The Impact of Satisfaction on Future Choices

Abstract

In recent years there has been disenchantment with the performance and relevance of customer satisfaction models in applied business contexts. An expected utility framework overcomes many of the weaknesses inherent in conventional customer satisfaction modelling and is introduced in the paper. The framework uses a three-stage designed choice experiment to assess the impact of disconfirmations and satisfaction on after experience choices. The impact of expectations, performance and satisfaction on future choices is estimated using summary statistics and binary logit models. Overall, satisfaction appears to have a significant impact on future choices although this impact does not appear to be linear. Updated expectations for the experienced brand also appear to be relevant in explaining post experience expected utility. The results provide insights for managers as to how product experiences and measured satisfaction can be used to provide essential input for decisions and to improve prediction of future key performance indicators.