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Does customer satisfaction matter to managers’ earnings forecasts and stock returns?

Jenny (Jiyeon) Lee (School of Marketing, University of New South Wales, Sydney, Australia)
Youngdeok Lim (School of Accounting, University of New South Wales, Sydney, Australia)
Hyung Il Oh (School of Business, University of Washington Bothell, Bothell, Washington, USA)

European Journal of Marketing

ISSN: 0309-0566

Article publication date: 14 September 2018

Issue publication date: 12 October 2018




The purpose of this study is to examine the relevance of American Customer Satisfaction Index (ACSI) to management voluntary forecasts of earnings. The authors further investigate whether the market reacts to such forecasts in respect of satisfaction.


The authors’ econometric models are constructed from previous work in accounting to specify the effect of ACSI on the issuance and optimism of management forecasts. Our model also specifies the impact of management optimism with respect to ACSI on stock returns. The data consisting of US firms in the 2001-2010 is collated from several databases and analyzed using multiple regression procedures.


Results indicate that ACSI is positively associated with the likelihood of issuing management forecasts and boosts management optimism. It is also found that investors react negatively to management optimism that is inherent in forecasts and results from satisfaction.

Research limitations/implications

The authors’ research findings not only complement prior work on the linkage between customer satisfaction and firm value by incorporating a managerial perspective but also respond to the recent call for further work on how relevant marketing metrics drive organizational decisions and firms’ financial performance. It should be noted that findings are limited to firms that release both a voluntary issuance of management forecasts and ACSI.

Practical implications

The study results shed light on the justification of marketing expenditures and provide a response to the call for marketing accountability. The study results also enable managers to make better decisions about whether and when to issue a forecast. The authors’ research further calls stakeholders’ attention to the presence of management forecast optimism with respect to satisfaction.


Despite the importance of managers as primary information generators and disseminators in the capital markets, there appears to be little discussion on the satisfaction’s relevance to market participants, particularly in relation to the role of managers. Therefore, this investigation is the first to empirically show the relevance of ACSI to management earnings forecasts that have been ignored in the marketing literature.



Lee, J.(J)., Lim, Y. and Oh, H.I. (2018), "Does customer satisfaction matter to managers’ earnings forecasts and stock returns?", European Journal of Marketing, Vol. 52 No. 9/10, pp. 2026-2051.



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Copyright © 2018, Emerald Publishing Limited

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