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Customer perception measures driving financial performance: theoretical and empirical work for a large decentralized banking group

Jan Eklof (Handelshogskolan i Stockholm, Stockholm, Sweden)
Katerina Hellstrom (Handelshogskolan i Stockholm, Stockholm, Sweden)
Aleksandra Malova (Saint-Petersburg State University, Saint Petersburg, Russia)
Johan Parmler (EPSI Research Services, London, UK)
Olga Podkorytova (Saint-Petersburg State University, Saint Petersburg, Russia)

Measuring Business Excellence

ISSN: 1368-3047

Article publication date: 21 August 2017




The purpose of this paper is to assess the usefulness and efficiency of customer-based measures such as customer satisfaction (CSI) and perceived loyalty for monitoring and enhancing the financial performance in corporations.


General financial data for the empirical modeling is compiled from national and international databases (Alla Bolag, IMF/IFS, Bloomberg, Eurostat, etc.) and company-specific data from the studied corporation. Customer perception data (like CSI and loyalty) are taken from the Extended Performance Satisfaction Index-initiative database (annual observations for the period 2001-2014 and quarterly for 2008-2014). A hierarchy of structural models is devised on a combined time-series and cross-section (panel and multi-level) approach. The results are based on models estimated by Arellano–Bond procedures (Arellano and Bond, 1991).


The core findings are two. First, there is a strong positive relationship between customer-based measures and financial performance. Second, it is effective to regularly monitor CSI as a forward- looking indicator for understanding future financial performance.

Practical implications

Customer-based measures are highly useful as leading indicators of companies’ future performance and should be incorporated even more into corporate decisions.


According to this survey of contemporary research, very little is academically documented for the full-circle from corporate to branch level. Thus, the prevailing study should be of potential value for companies in general.



Eklof, J., Hellstrom, K., Malova, A., Parmler, J. and Podkorytova, O. (2017), "Customer perception measures driving financial performance: theoretical and empirical work for a large decentralized banking group", Measuring Business Excellence, Vol. 21 No. 3, pp. 239-249.



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