Customer satisfaction directly influences a company's sales, margins, and earnings, and companies that track and measure customer satisfaction have a leg up on competition. Getty Images

Back when people flew nonchalantly for business, an unabashed fan of Great Reputation Airline took a flight where almost everything went wrong. First there was a weather delay. Then there was a mechanical issue. The crew was surly, the pretzels stale. Finally, after landing, when she finally made it to baggage claim, her suitcase was MIA.

But instead of complaining on social media, Great Reputation's passenger wrote off the problems to a rare bad day for the airline – which showered her with drink coupons and later delivered her luggage to her hotel.

GRA's response exemplifies customer satisfaction principles outlined in a paper by Rice Business professor Vikas Mittal and former Rice Business doctoral student Carly Frennea. Summarizing the major research about customer satisfaction, the coauthors codified their findings into a checklist for managers.

While most people understand the general concept of customer satisfaction, in business it's a specific term summarizing a consumer's post-use evaluation of the extent to which a product or service met their expectations. Satisfied customers are more likely to buy again, buy more, recommend a business to others and cost less to serve in the future. A satisfied customer doesn't just cut customer-acquisition costs. She can also help a business attract the right customers through online recommendations.

But the most compelling reason to chase customer satisfaction, say Mittal and Frennea, comes from the University of Michigan's American Customer Satisfaction Index, which tracks customer satisfaction ratings of public companies. Decades of studies based on this data show that customer satisfaction and financial performance go hand-in-hand. While the strength of this association can vary, the link is indisputable. "Nowhere else in marketing has the impact of a customer-based metric on a firm's financial performance been so clearly and consistently established," Mittal and Frennea write.

To help make that satisfaction/revenue link a felicitous one, the researchers recommend the five kinds of data managers should collect.

  • Overall customer satisfaction: A summary evaluation of an overall experience.
  • Behavioral intentions: "Loyalty metrics" that measure the likelihood of buying again, recommending to others and intent to complain.
  • Attribute-level perceptions: Evaluating specific product or service features. For a doctor, this may include time spent waiting in the office, quality of care and explanation of diagnosis. For an oilfield services company, this may include product quality, safety, ongoing service and support, billing and pricing.
  • Contextual information: Comparisons to earlier experiences with a firm and against those with competitors.
  • Customer background variables: Includes gender, age and use of competitors' products and services.

Once these data are collected, the researchers say, managers should use statistical analysis that includes all relevant variables (a method known as multiple regression). This allows companies to figure out which variables have the largest association with overall satisfaction, and which have none. For example, a multiple regression might show that the bad effect of dashing customer expectations is stronger than the good effect of exceeding those expectations. The analysis may also reveal that this effect is stronger for ongoing service and support, say, than for pricing and billing. Conclusion: The company should fix problems with ongoing service and support before tinkering with its pricing and billing strategy.

Companies should also share such customer satisfaction insights with employees and incentivize them to make customer satisfaction a top priority, the researchers write.

To achieve this, executives need to see customer satisfaction as a strategic tool, not just a "good-to-have" afterthought. For this:

  • Treat customer satisfaction as a strategic investment and integrate it into the strategic planning process.
  • Don't skimp on the science. Use the most advanced multiple regression models, and now machine-learning technologies, to distinguish the important from the unimportant, and prioritize the important.
  • Using statistical science, link customer-loyalty patterns to actual behaviors such as repurchasing and repeat sales.
  • Remember that your front-line employees are vital and motivate them by linking their performance to the right customer satisfaction metrics.
  • Don't just maximize customer satisfaction. Balance decreasing and increasing returns on satisfaction initiatives. For this, don't rely on "voice-of-customer" based on casual interviews and discussions. Use rigorously designed customer studies that can be statistically linked to financial results.
  • Share! Summarize satisfaction findings in understandable terms and train employees to act on them. Smart companies use this approach to derive their customer-value proposition and focus the company's strategy.

The formula, after all, is a simple one. If customers are a primary source of your company's cash flow, the first variable in your strategy needs to be making them happy.

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This story originally ran on Rice Business Wisdom. It's based on research from Vikas Mittal, the J. Hugh Liedtke Professor of Marketing at Jones Graduate School of Business at Rice University, and Carly Frennea, now an executive at Nike, who received her M.B.A. and Ph.D. at Jones Graduate School of Business.

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Houston's Ion District to expand with new research and tech space, The Arc

coming soon

Houston's Ion District is set to expand with the addition of a nearly 200,000-square-foot research and technology facility, The Arc at the Ion District.

Rice Real Estate Company and Lincoln Property Company are expected to break ground on the state-of-the-art facility in Q2 2026 with a completion target set for Q1 2028, according to a news release.

Rice University, the new facility's lead tenant, will occupy almost 30,000 square feet of office and lab space in The Arc, which will share a plaza with the Ion and is intended to "extend the district’s success as a hub for innovative ideas and collaboration." Rice research at The Arc will focus on energy, artificial intelligence, data science, robotics and computational engineering, according to the release.

“The Arc will offer Rice the opportunity to deepen its commitment to fostering world-changing innovation by bringing our leading minds and breakthrough discoveries into direct engagement with Houston’s thriving entrepreneurial ecosystem,” Rice President Reginald DesRoches said in the release. “Working side by side with industry experts and actual end users at the Ion District uniquely positions our faculty and students to form partnerships and collaborations that might not be possible elsewhere.”

Developers of the project are targeting LEED Gold certification by incorporating smart building automation and energy-saving features into The Arc's design. Tenants will have the opportunity to lease flexible floor plans ranging from 28,000 to 31,000 square feet with 15-foot-high ceilings. The property will also feature a gym, an amenity lounge, conference and meeting spaces, outdoor plazas, underground parking and on-site retail and dining.

Preleasing has begun for organizations interested in joining Rice in the building.

“The Arc at the Ion District will be more than a building—it will be a catalyst for the partnerships, innovations and discoveries that will define Houston’s future in science and technology,” Ken Jett, president of Rice Real Estate Company, added in the release. “By expanding our urban innovation ecosystem, The Arc will attract leading organizations and talent to Houston, further strengthening our city’s position as a hub for scientific and entrepreneurial progress.”

Intel Corp. and Rice University sign research access agreement

innovation access

Rice University’s Office of Technology Transfer has signed a subscription agreement with California-based Intel Corp., giving the global company access to Rice’s research portfolio and the opportunity to license select patented innovations.

“By partnering with Intel, we are creating opportunities for our research to make a tangible impact in the technology sector,” Patricia Stepp, assistant vice president for technology transfer, said in a news release.

Intel will pay Rice an annual subscription fee to secure the option to evaluate specified Rice-patented technologies, according to the agreement. If Intel chooses to exercise its option rights, it can obtain a license for each selected technology at a fee.

Rice has been a hub for innovation and technology with initiatives like the Rice Biotech Launch Pad, an accelerator focused on expediting the translation of the university’s health and medical technology; RBL LLC, a biotech venture studio in the Texas Medical Center’s Helix Park dedicated to commercializing lifesaving medical technologies from the Launch Pad; and Rice Nexus, an AI-focused "innovation factory" at the Ion.

The university has also inked partnerships with other tech giants in recent months. Rice's OpenStax, a provider of affordable instructional technologies and one of the world’s largest publishers of open educational resources, partnered with Microsoft this summer. Google Public Sector has also teamed up with Rice to launch the Rice AI Venture Accelerator, or RAVA.

“This agreement exemplifies Rice University’s dedication to fostering innovation and accelerating the commercialization of groundbreaking research,” Stepp added in the news release.

Houston team develops low-cost device to treat infants with life-threatening birth defect

infant innovation

A team of engineers and pediatric surgeons led by Rice University’s Rice360 Institute for Global Health Technologies has developed a cost-effective treatment for infants born with gastroschisis, a congenital condition in which intestines and other organs are developed outside of the body.

The condition can be life-threatening in economically disadvantaged regions without access to equipment.

The Rice-developed device, known as SimpleSilo, is “simple, low-cost and locally manufacturable,” according to the university. It consists of a saline bag, oxygen tubing and a commercially available heat sealer, while mimicking the function of commercial silo bags, which are used in high-income countries to protect exposed organs and gently return them into the abdominal cavity gradually.

Generally, a single-use bag can cost between $200 and $300. The alternatives that exist lack structure and require surgical sewing. This is where the SimpleSilo comes in.

“We focused on keeping the design as simple and functional as possible, while still being affordable,” Vanshika Jhonsa said in a news release. “Our hope is that health care providers around the world can adapt the SimpleSilo to their local supplies and specific needs.”

The study was published in the Journal of Pediatric Surgery, and Jhonsa, its first author, also won the 2023 American Pediatric Surgical Association Innovation Award for the project. She is a recent Rice alumna and is currently a medical student at UTHealth Houston.

Bindi Naik-Mathuria, a pediatric surgeon at UTMB Health, served as the corresponding author of the study. Rice undergraduates Shreya Jindal and Shriya Shah, along with Mary Seifu Tirfie, a current Rice360 Global Health Fellow, also worked on the project.

In laboratory tests, the device demonstrated a fluid leakage rate of just 0.02 milliliters per hour, which is comparable to commercial silo bags, and it withstood repeated disinfection while maintaining its structure. In a simulated in vitro test using cow intestines and a mock abdominal wall, SimpleSilo achieved a 50 percent reduction of the intestines into the simulated cavity over three days, also matching the performance of commercial silo bags. The team plans to conduct a formal clinical trial in East Africa.

“Gastroschisis has one of the biggest survival gaps from high-resource settings to low-resource settings, but it doesn’t have to be this way,” Meaghan Bond, lecturer and senior design engineer at Rice360, added in the news release. “We believe the SimpleSilo can help close the survival gap by making treatment accessible and affordable, even in resource-limited settings.”