Saturday, December 13, 2008

A Dissssenting Opinion

I saw a blog by Perceptions dated December 6th where the author takes to task the ACSI (American Customer Satisfaction Index). The author provides two charts. The first chart shows the ACSI scores for four financial services companies (Wachovia, Bank of America, JP Morgan and Wells Fargo) over the last 4 years (2003 through 2007). The second chart shows the stock performance of these same companies for the first ten months of 2008. A simple viewing of the two charts shows that customer satisfaction is very stable for each of the four financial institutions and the stock performance shows dramatic decline in 2008.

I believe the author is making the point that customer satisfaction can't predict the future performance of companies. I suggest the author read the book "the Black Swan" by Nassim Taleb to see if he can understand that there may be some other variables in play. He may also want to review the very many papers that show strong correlations between customer satisfaction and financial performance. I don't think thee is anyone who truly believes that customer satisfaction is the only driver of future performance of a company. To think that customer satisfaction is the sole driver of a company's financial performance is a clue to the depth of the author's knowledge. Naivete' doesn't wear well on the web.

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