Any responsible executive with an automotive company will answer in the affirmative about the seriousness of customer satisfaction to his or her company. But extend this question and ask why, and the answers begin to get a bit more varied. Some of the answers may sound rhetorical, some may not, depending on who you ask. Common sense tells us that customer satisfaction is good for business.

It helps carmakers in their business. Customer satisfaction ratings and indices such as CSI and SSI figure among the key result area (KRA) of most of us and our individual gains are also attached to them. Many car companies have been spending money buying customer satisfaction survey reports, making process improvements and conducting training programmes.

What if you were shown various researches that claim that customer satisfaction (as measured by various methods today) had very little correlation with profitability and market share, even in the long run? What if I urged you to show me an action profit linkage between investment in improving the customer satisfaction index and profitability enhancement, even with some time lag?

All of this would probably lead to a debate based on intuitive arguments, experiences, opinion and so on, but it would be pleasantly surprising if someone showed me a specific analysis carried out within his or her company on how their investments in customer satisfaction improvement resulted in higher profitability.

If it is agreed that companies are in the business to make profits and create shareholder value, then it would be fair to say that investment that does not help achieve this goal is not worthy of consideration. Customer satisfaction is important to a company only to the extent it helps the company enhance sales, market share, profitability or any other measure of importance. If not, no one is interested unless he or she is really envious of Mr Khattar and his team at Maruti for getting all the attention for achieving highest customer satisfaction rankings year after year.

Most of us understand the need to be focused on the core economic logic that should always drive our businesses while we keep creating 'feel good' in the media. We also understand the difference between boardroom talks and press-room talks. It is possible that many of us are not bothered about this return on investment issue on the money spent on enhancement of customer satisfaction as it does not represent a substantial amount of the marketing budget in percentage terms.

In that case, let us consider advertising and customer satisfaction improvement as two alternative marketing investments. Now consider the proposal of diverting 25 percent of a company’s advertising budget into customer satisfaction enhancement. Why should one not take this decision if it results in higher financial gains? After all we are here to make money. The answers to these dilemmas lie in a deeper understanding of what customer satisfaction can do for auto companies. It is, therefore, as important to understand why automakers must invest in customer satisfaction as it is why not to?