Marketing Letters

, Volume 24, Issue 1, pp 13–27 | Cite as

Customer satisfaction as a buffer against sentimental stock-price corrections

  • Robert P. Merrin
  • Arvid O. I. HoffmannEmail author
  • Joost M. E. Pennings


Previous research has shown that customer satisfaction is a market-based asset that can contribute to a firm’s value by increasing its stock-market returns, while simultaneously reducing the riskiness of these returns. This study contributes to the growing literature on the marketing–finance interface by examining the relationship between customer satisfaction and a type of risk that has not been previously studied in the marketing literature: the vulnerability of a firm’s stock price to the stock-market corrections that typically follow periods of high investor sentiment. The results show that customer satisfaction can function as a buffer against the risk of such sentimental stock-price movements and reduces their negative impact on a firm’s market value. In particular, we find that firms with higher (lower) levels of customer satisfaction exhibit smaller (greater) price corrections and higher returns after periods of high investor sentiment.


Customer satisfaction Investor sentiment Market-based assets Marketing–finance interface 



The authors thank the editor, Frank R. Kardes, and an anonymous reviewer for their insightful comments that helped us improve the manuscript. The authors thank Jeroen Derwall and Peter Schotman for their useful suggestions regarding the econometric analyses. Finally, the authors thank Donna Maurer for her editorial help.


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Copyright information

© Springer Science+Business Media New York 2012

Authors and Affiliations

  • Robert P. Merrin
    • 1
    • 2
  • Arvid O. I. Hoffmann
    • 1
    • 2
    • 3
    Email author
  • Joost M. E. Pennings
    • 1
    • 2
    • 4
    • 5
  1. 1.Department of Finance, School of Business and EconomicsMaastricht UniversityMaastrichtThe Netherlands
  2. 2.Marketing-Finance Research Lab, School of Business and EconomicsMaastricht UniversityMaastrichtThe Netherlands
  3. 3.Network for Studies on Pensions, Aging and Retirement (Netspar)TilburgThe Netherlands
  4. 4.Department of Marketing, School of Business and EconomicsMaastricht UniversityMaastrichtThe Netherlands
  5. 5.Department of Marketing and Consumer BehaviorWageningen UniversityWageningenThe Netherlands

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