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Many researches have proposed a virtuous chain of effects from improved customer satisfaction to profits. In particular, satisfaction is thought to improve share‐of‐spending, which in turn leads to higher customer revenue and customer profitability. This paper aims to examine these proposed linkages using data from the institutional securities industry.

The data used in the analyses were collected as part of an ongoing telephone satisfaction survey of 81 clients of an institutional securities firm across two continents (North America and Europe). Mediation analysis was used to test the hypothesized effects.

Customer revenue was found to correlate negatively with customer profitability for unprofitable customers, and positively for profitable customers.

One of the limitations of this research is that it tests the propositions within a single industry. Future research should attempt to replicate these findings in other contexts.

A simplistic focus on improving customer satisfaction for all customers in order to improve share‐of‐wallet and customer revenue does not seem to represent the best management approach to maximize overall firm profitability. In fact, it could actually result in a negative return on investment. Therefore, customers should first be segmented by their profitability to the firm before expending resources to improve customer satisfaction and share‐of‐wallet.

The results of this paper challenge the conventional belief that customer satisfaction should lead to customer retention in turn, resulting in customer revenue and ultimately customer profitability. The findings indicate that this may not always be true.

The purpose of this study is to investigate the relationship between parent satisfaction and child retention at a childcare provider.

The survey data used in the analyses involves a sample size of 1,003 respondents, all clients of a regional childcare provider in the USA. Logistic regression was used to test the propositions.

The results indicate that parent satisfaction is most important to child retention when the child is very young (birth to one year of age). As children increase in age, however, parent satisfaction becomes increasingly less predictive of children's continued enrollment at a childcare facility.

One of the limitations of this research is that it tests the propositions within a single firm. Future research should attempt to replicate these findings across several childcare providers.

Emphasizing improvements in different attributes for different age groups has implications for increasing retention for childcare providers, in addition to ultimately increasing the satisfaction of parents.

While all would agree that childcare services are of extremely high importance (at both a national and individual level), no research to date has examined the role of parent satisfaction to the continued enrollment of a child at a childcare facility. Our findings show that the presumed relationship between satisfaction and retention varies greatly by the age of child.