Assessing Heterogeneity in Customer Satisfaction Studies: Across Industry Similarities and within Industry Differences

Abstract

Purpose – Revisiting Fornell et al.'s (1996) seminal study, this chapter looks at the evidence for observed and unobserved heterogeneity within data underlying the American customer satisfaction index (ACSI) model. Examining data for two specific industries (utilities and hotels) reveals only modest differences. However, we suppose that unobserved heterogeneity critically affects the results. These insights provide the basis for shaping further differentiated ACSI model analyses and more precise interpretations. Methodology/approach – This study applies the partial least squares (PLS) path modeling method and uses empirical data to estimate and compare the ACSI model results on the aggregate and industry-specific data levels. In addition, the finite mixture PLS path modeling (FIMIX-PLS) method is employed to further examine across industry similarities and within industry differences. Findings – This research uncovers unobserved heterogeneity that guides forming three segments of customers within each industry. The major segment in each industry represents customers that are fairly loyal (i.e., neither disloyal nor extremely loyal) while the other two smaller segments are not as similar across the two industries. Our study identifies substantial differences across these segments within each industry. An importance-performance map analysis illustrates these differences and provides the basis for managerial implications. Originality/value of the chapter – The unobserved heterogeneity revealed within industries in a given country (i.e., the United States of America) underlines the need to be open to differences within populations, beyond the observed heterogeneity across distinct groups or cultures, and the need to reconsider reporting requirements in academic research.