Discriminant validity assessment has become a generally accepted prerequisite for analyzing relationships between latent variables. For variance-based structural equation modeling, such as partial least squares, the Fornell-Larcker criterion and the examination of cross-loadings are the dominant approaches for evaluating discriminant validity. By means of a simulation study, we show that these approaches do not reliably detect the lack of discriminant validity in common research situations. We therefore propose an alternative approach, based on the multitrait-multimethod matrix, to assess discriminant validity: the heterotrait-monotrait ratio of correlations. We demonstrate its superior performance by means of a Monte Carlo simulation study, in which we compare the new approach to the Fornell-Larcker criterion and the assessment of (partial) cross-loadings. Finally, we provide guidelines on how to handle discriminant validity issues in variance-based structural equation modeling.

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A new criterion for assessing discriminant validity in variance-based structural equation modeling

Both practitioners and academics understand that consumer loyalty and satisfaction are linked inextricably. They also understand that this relation is asymmetric. Although loyal consumers are most ...

https://www.jstor.org/stable/pdf/1252099.pdf

Whence Consumer Loyalty

Assessing the effects of quality, value, and customer satisfaction on consumer behavioral intentions in service environments

This paper examines cognitive beliefs and affect influencing one's intention to continue using (continuance) information systems (IS). Expectation-confirmation theory is adapted from the consumer behavior literature and integrated with theoretical and empirical findings from prior IS usage research to theorize a model of IS continuance. Five research hypotheses derived from this model are empirically validated using a field survey of online banking users. The results suggest that users' continuance intention is determined by their satisfaction with IS use and perceived usefulness of continued IS use. User satisfaction, in turn, is influenced by their confirmation of expectation from prior IS use and perceived usefulness. Post-acceptance perceived usefulness is influenced by users' confirmation level. This study draws attention to the substantive differences between acceptance and continuance behaviors, theorizes and validates one of the earliest theoretical models of IS continuance, integrates confirmation and user satisfaction constructs within our current understanding of IS use, conceptualizes and creates an initial scale for measuring IS continuance, and offers an initial explanation for the acceptance-discontinuance anomaly.

https://www.jstor.org/stable/pdfplus/3250921.pdf

Understanding information systems continuance: an expectation-confirmation model

Are there economic benefits to improving customer satisfaction? Many firms that are frustrated in their efforts to improve quality and customer satisfaction are beginning to question the link betwe...

Customer satisfaction, market share, and profitability: Findings from Sweden.

This research investigates the antecedents and consequences of customer satisfaction. We develop a model to link explicitly the antecedents and consequences of satisfaction in a utility-oriented framework. We estimate and test the model against alternative hypotheses from the satisfaction literature. In the process, a unique database is analyzed: a nationally representative survey of 22,300 customers of a variety of major products and services in Sweden in 1989-1990. Several well-known experimental findings of satisfaction research are tested in a field setting of national scope. For example, we find that satisfaction is best specified as a function of perceived quality and "disconfirmation"-the extent to which perceived quality fails to match prepurchase expectations. Surprisingly, expectations do not directly affect satisfaction, as is often suggested in the satisfaction literature. In addition, we find quality which falls short of expectations has a greater impact on satisfaction and repurchase intentions than quality which exceeds expectations. Moreover, we find that disconfirmation is more likely to occur when quality is easy to evaluate. Finally, in terms of systematic variation across firms, we find the elasticity of repurchase intentions with respect to satisfaction to be lower for firms that provide high satisfaction. This implies a long-run reputation effect insulating firms which consistently provide high satisfaction.

The Antecedents and Consequences of Customer Satisfaction for Firms

The American Customer Satisfaction Index (ACSI) is a new type of market-based performance measure for firms, industries, economic sectors, and national economies. The authors discuss the nature and...

/pdf/the-american-customer-satisfaction-index-nature-purpose-and-34k94qjuh5.pdf

The American Customer Satisfaction Index: Nature, Purpose, and Findings

Do dissatisfied customers engage in more or less word of mouth than satisfied customers? There is theoretical and empirical support for both possibilities. To better understand this issue, the authors developed a utility-based model of the relationship between customer satisfaction and word of mouth. The hypothesized functional form-an asymmetric U-shape-cannot be rejected based on data from the United States and Sweden. In addition, the estimation results based on the two samples are similar, suggesting that the proposed relationship is generalizable. The findings also indicate that although dissatisfied customers do engage in greater word of mouth than satisfied ones, common suppositions concerning the size of this difference appear to be exaggerated.

Customer Satisfaction and Word of Mouth

Customer satisfaction programs do not always deliver anticipated results. Disenchanted, some have labeled satisfaction measurement a "trap" and argued for abandoning customer satisfaction as a means for optimizing customer retention and profitability. The authors argue that doing so may be a mistake because the satisfaction-profit chain is conceptually solid. However, to achieve results, an important step is to recognize that the links in the satisfaction-profit chain are asymmetric and nonlinear. In this article, the authors review recent developments pertaining to the asymmetric and nonlinear nature of the links involved. They also discuss several examples based on commercial satisfaction studies where incorporating the asymmetry and nonlinearity added significant value to the firm’s understanding of the satisfaction-profit chain.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2345327_code1783641.pdf?abstractid=2345327&mirid=1

Eugene W. Anderson

Papers

Customer satisfaction, market share, and profitability: Findings from Sweden.

The Antecedents and Consequences of Customer Satisfaction for Firms

The American Customer Satisfaction Index: Nature, Purpose, and Findings

Customer Satisfaction and Word of Mouth

Strengthening the Satisfaction-Profit Chain