Customer Attitude from Social Media, Customer Satisfaction Index, and Firm Value

While social media has emerged as a key source of customer satisfaction used by investors in their investment decision, whether and how social media metrics on customer attitude toward the company has not been thoroughly examined. This study develops a new index of customer satisfaction by using the sentiment and content analyses on the customer-generated social media content. Across multiple social media platforms, by using a semiparametric regression model, we found that customer positive testimonials, “Likes” (from Facebook), and positive blogs are positively and statistically associated with customer satisfaction, while customer complaints (from Facebook), negative blogs, and negative tweets are negatively associated with it. Further, we found that new customer satisfaction index based on social media metrics is positively and statistically associated with firm’s market performance. In addition, we suggest that social media metrics about customer attitude toward the company would complement existing customer satisfaction index such as ACSI.