Companies and organisations apply non-financial performance measures, such as human capital, brand equity and customer assets as corporate brand amplifier as well as to complement indicators of traditional financial measures. It is crucial to understand how companies and organisations may use non-financial assets to create value for their stakeholders.
Using customer perception data from the Extended Performance Satisfaction Index (EPSI) Rating database, this study evaluates the relationship between customer satisfaction and corporate social responsibility (CSR). We apply the EPSI model and find a positive relationship between CSR and customer satisfaction, mediated by the effect of CSR on company image.
Furthermore, there are non-linear relationships between CSR and customer satisfaction, leading to a proposed CSR-effect curve. From a managerial perspective, the effect of CSR on customer satisfaction is a function of the company’s perceived efforts related to CSR. Hence, an improvement in CSR ratings from customers is expected to impact the business’ bottom line, since improvement in customer satisfaction is known to positively impact financial performance.