Interesting Results

Customer Satisfaction and Willingness to Pay

Are customers who are more satisfied willing to pay more for products and services? Conventional wisdom suggests that they are. Results of a 2005 study¹ suggest that while this is generally correct, the relationship is a non-linear one: When customer satisfaction is significantly above or below average, an increase or decrease in customer satisfaction creates a relatively big change in the amount that people are willing to pay for the product or service, but when customer satisfaction levels are more average, then much bigger changes in customer satisfaction levels are required to generate the same amount of change in the amount people are willing to pay for the product or service.

¹ Homburg, Christian, Nicole Koshchate, and Wayne Hoyer (2005), “Do Satisfied Customers Really Pay More? A Study of the Relationship Between Customer Satisfaction and Willingness to Pay”, Journal of Marketing, 69(2), 84-96.