Featured Research

from universities, journals, and other organizations

Customer satisfaction increases the value and interest of company shares for institutional investors

Date:
August 29, 2013
Source:
Aalto University
Summary:
How do institutional investors react to customer satisfaction with companies on the stock market? A research conducted a study showing that improved customer satisfaction with a company causes institutional investors to increase their ownership in that firm and has a positive impact on share value.

How do institutional investors react to customer satisfaction with companies on the stock market? A research group run by Jaakko Aspara, who is a professor in the Department of Marketing at Aalto University School of Business in Finland, conducted a study showing that improved customer satisfaction with a company causes institutional investors to increase their ownership in that firm and has a positive impact on share value.

Related Articles


The study was published in the highly regarded Journal of the Academy of Marketing Science.

It shows that transient institutional investors, such as equity funds, are particularly likely to increase their ownership in companies that improve their customer satisfaction. They correspondingly reduce ownership in companies where customer satisfaction decreases.

'It's somewhat surprising to find that transient institutional investors, who we often see as focusing only on quarterly profit forecasts, also react to customer satisfaction, which reflects a firm's long-term marketing competence', states Professor Jaakko Aspara.

The study utilised the extensively-used American Customer Satisfaction Index (ACSI) as an indicator of customer satisfaction. This index surveys the customer satisfaction of more than 200 large companies in the USA market and is published several times per year. Nokia is one of the companies included in the ACSI survey.

The research group found that institutional investors react more strongly to changes in customer satisfaction in uncertain product markets.

'For example, the consumer electronics market changes very rapidly. In such markets, institutional investors seem to place an increasing amount of value on customer satisfaction,' comments Aspara.

'The fact that an increase in the ACSI figure for Nokia's customer satisfaction in May was followed by reports indicating that certain large institutional investors were interested in the company corresponds to our results. The value of Nokia's shares has also gone up.'

The study shows that the increase in ownership by transient institutional investors as customer satisfaction improves also leads to a rise in share value and a decrease in share-specific risk. This provides companies with the opportunity to reinforce the value of their shares.

The study concludes that reporting improvements in a company's customer satisfaction to a larger number of transient institutional investors can be expected to strengthen company value.


Story Source:

The above story is based on materials provided by Aalto University. Note: Materials may be edited for content and length.


Journal Reference:

  1. Xueming Luo, Ran Zhang, Weining Zhang, Jaakko Aspara. Do institutional investors pay attention to customer satisfaction and why? Journal of the Academy of Marketing Science, 2013; DOI: 10.1007/s11747-013-0342-9

Cite This Page:

Aalto University. "Customer satisfaction increases the value and interest of company shares for institutional investors." ScienceDaily. ScienceDaily, 29 August 2013. <www.sciencedaily.com/releases/2013/08/130829093034.htm>.
Aalto University. (2013, August 29). Customer satisfaction increases the value and interest of company shares for institutional investors. ScienceDaily. Retrieved October 25, 2014 from www.sciencedaily.com/releases/2013/08/130829093034.htm
Aalto University. "Customer satisfaction increases the value and interest of company shares for institutional investors." ScienceDaily. www.sciencedaily.com/releases/2013/08/130829093034.htm (accessed October 25, 2014).

Share This



More Science & Society News

Saturday, October 25, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Texas Nurse Nina Pham Cured of Ebola

Texas Nurse Nina Pham Cured of Ebola

AFP (Oct. 25, 2014) An American nurse who contracted Ebola while caring for a Liberian patient in Texas has been declared free of the virus and will leave the hospital. Duration: 01:01 Video provided by AFP
Powered by NewsLook.com
Ebola Protective Suits Being Made in China

Ebola Protective Suits Being Made in China

AFP (Oct. 24, 2014) A factory in China is busy making Ebola protective suits for healthcare workers and others fighting the spread of the virus. Duration: 00:38 Video provided by AFP
Powered by NewsLook.com
WHO: Millions of Ebola Vaccine Doses by 2015

WHO: Millions of Ebola Vaccine Doses by 2015

AP (Oct. 24, 2014) The World Health Organization said on Friday that millions of doses of two experimental Ebola vaccines could be ready for use in 2015 and five more experimental vaccines would start being tested in March. (Oct. 24) Video provided by AP
Powered by NewsLook.com
Microsoft Riding High On Strong Surface, Cloud Performance

Microsoft Riding High On Strong Surface, Cloud Performance

Newsy (Oct. 24, 2014) Microsoft's Q3 earnings showed its tablets and cloud services are really hitting their stride. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Science & Society

Business & Industry

Education & Learning

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins