Accounting for customer satisfaction: evidence of corporate performance value relevance from top global brands


Purpose
Customer satisfaction (CS) is a key factor in maintaining customer relations and achieving corporate success. This paper aims to empirically investigate the value relevance of CS accounting for corporate performance (CP) of top global brands worldwide.


Design/methodology/approach
A sample of top 100 global brands located in different countries and operating over various industries is examined for a period of three years comprising 2020 till 2022. A quantitative research methodology is used for conducting content analysis of companies’ annual reports and carrying out ordinary least squares multiple regression tests using different financial and market measures, as proxies for CP.


Findings
Results show that CS can significantly enhance CP. Findings indicate a significant positive association of current and lagged CS with both profitability and market value, thereby documenting consistent evidence in a global market setting.


Research limitations/implications
The study provides an aggregate picture of the value relevance of CS while a disaggregated view across different industries can reveal deeper insights. However, the study has important implications for corporate executives, investors, accountants and standard setters, offering global insights that appreciate CS for improving CP and creating value for businesses. It helps in understanding customers preferences, designing corporate policies and strategies, predicting CP, developing alternative methods of CS measurement and reporting and recommending possible accounting treatments.


Originality/value
This study adds to the relatively limited literature on the potential contribution of CS within the accounting literature. It extends the scope of prior research by documenting quantitative empirical evidence of the value relevance of CS for CP of top global brands, using different financial and market measures. It provides international insights into a global market setting, in which diversity is inherent and competition is fierce. Hence, the study largely contributes to resolving existing debate by documenting consistent objective evidence over a wide regional diversity using various indicators.
