Influence of perceptual metrics on customer profitability: The mediating effect of behavioural metrics

Abstract

Accountability of marketing actions is a topic of ongoing interest. In accordance with the growing importance of the subject, a multitude of customer metrics has been developed intended to measure and value marketing investments and link their returns to financial results and performance. Managers widely acknowledge the need for quantitative measures of marketing performance but now face the challenge of deciding which metrics to measure and how to interpret them. One of the main difficulties lies in the interdependencies of metrics. Those interdependencies may lead to serious misinterpretation and have been widely neglected in the existing literature. Therefore, this study empirically tests if the influence of customer perceptual metrics (for example, customer satisfaction) on customer profitability persists when customer behavioural metrics are considered. We use data from a large European financial service provider. Our findings support the relevance of mediating effects of customer behavioural metrics (for example, cross-selling ratio) on the relationship between customer perceptual metrics and customer profitability. The article contributes significantly to the body of knowledge about interdependencies between different customer metric combinations by considering direct and indirect links, testing for mediator effects, and evaluating their impact on customer profitability.