Reexamining the Market Share--Customer Satisfaction Relationship.

Market share and customer satisfaction are often used to assess marketing performance. Despite the widespread assumption of a positive relationship between these two variables, the limited extant empirical literature on the subject indicates either a negative or a no significant relationship. The authors reexamine this relationship over a longer time period than has previously been possible in a representative sample of U.S. consumer markets and find a consistently significant negative market share-customer satisfaction relationship. This is because customer satisfaction is generally not predictive of firms' future market share, but market share is a strong negative predictor of firms' future customer satisfaction. In follow-up analyses, the authors find that a firm's customer satisfaction can predict its future market share when it is benchmarked against that of its nearest rival and customer-switching costs are low. In examining why the market share-future customer satisfaction relationship is generally negative, they find strong support for preference heterogeneity as a key mediator in this relationship. They also show that marketing more brands moderates the negative effect of preference heterogeneity on future customer satisfaction. Thus, larger brand portfolios offer a strategy solution for the general market share-satisfaction trade-off.

Purpose – The purpose of this paper is to contribute to the understanding of sales performance measurement by developing an organizing framework for classifying sales performance measures based on the various performance criteria used by researchers. Subsequently, the results of both a focus group and in-depth interviews with sales managers and salespeople will be presented using the classification framework developed. The objective is to determine whether gaps exist between how researchers and practitioners view and classify salesperson performance measures as well as to provide insights to effective sales management practices in areas such as salesperson skill development, goal attainment, resource allocation, and customer relationship management.

Design/methodology/approach – A qualitative study, using in-depth interviews, explores the relationship between sales managers and salespersons and their respective views on sales performance measurement. The interview questions were developed using information derived from a sales executive focus group. In-person in-depth interviews were conducted with eight sales managers and eight salespeople from eight organizations.

Findings – The paper proposes a new method for organizing the types of performance measures that are used, crossing effectiveness-efficiency with internally-externally-focused measures. The findings indicate that a gap appears to remain between the attributes of performance that researchers focus on and what occurs in the world of sales.

Research limitations/implications – The findings suggest that sales control theories can be used to present an organizing framework of sales performance based on sales outputs, salesperson skill/capability development, sales activities, and market indicators. Our typology might serve as a way to better understand certain research areas where there have been inconsistent findings, and should lead to new measure development for empirical research. In addition, a number of manager and salesperson recommendations for the practicing sales manager are reviewed.

Originality/value – This paper helps to clarify an area that is characterized by ambiguity and an identified need to identify new performance metrics.

Works Cited


 Journal of Marketing. Sep2013, Vol. 77 Issue 5, p1-20. 20p. 11 Charts, 1 Graph.