Customer Satisfaction predicts Stock Performance


Researcher Fornell and his team proved that the aggregate American Customer Satisfaction Index (ACSI) data is a strong predictor of Gross Domestic Product (GDP) growth, and an even stronger predictor of Personal Consumption Expenditure (PCE) growth. This latter result is especially surprising, given that many economists continue to identify PCE growth as a "random walk" with no significant or consistent predictors.
Furthermore, Fornell and his collaborators have shown that ACSI data predicts stock market performance, both for market indices and for individually traded companies. In a 2006 paper published in the Journal of Marketing, Fornell and his coauthors argued that a hypothetical, back-tested portfolio of stocks chosen based on their performance in ACSI outperformed the New York Stock Exchange (the Dow), the NASDAQ and the S&P 500,a finding that has since been supported by other researchers. See for example in Aksoy, Lerzan et al. "The Long Term Stock Market Valuation of Customer Satisfaction," Journal of Marketing, Vol. 72, 105-122)

You can download the full original report of Fornell here;
Customer Satisfaction and Stock Prices: High Returns, Low Risk

Resources:
http://en.wikipedia.org/wiki/American_Customer_Satisfaction_Index

No comments: