Customer satisfaction has emerged as an important benchmark for gauging business performance. Satisfaction increases customer loyalty and retention, which over time increases revenues and lowers costs to increase profitability (Johnson 1998; Reichheld 1996). Satisfaction benchmarking has taken on national and international significance with the development of national satisfaction barometers and indices in Sweden (Fornell 1992), Germany (Meyer 1994) and the United States (Fornell et al. 1996). Other countries, including New Zealand, Taiwan and Austria, have tested indices on a smaller scale while still others are undertaking similar projects. There is also a proposal for a European Customer Satisfaction Index (ECSI), a joint effort across nations in the European Union.
It remains to be seen whether these indices will develop on a global level and, importantly, in what form. Of critical importance to the validity and reliability of such indices is that the methods and models used to measure customer satisfaction and related constructs continue to learn, adapt, and improve over time. The goal of this report is to facilitate this learning, adaptation and improvement process. We begin with a discussion of the foundations for making broad-based comparisons of satisfaction across individual, industries, and nations. We then describe the evolution of national satisfaction indices, including details of the current model being used in the United States and Sweden, and review evidence of the comparability of satisfaction measures across industries and countries. Both the strengths and weaknesses inherent in the current approaches are detailed. Finally, we propose a series of improvements for measuring and modeling satisfaction going forward.