Recently i came across research by Prof. Claes Fornell. The research compared the cumulative returns on the customer satisfaction portfolio based on American Customer Satisfaction Index (ACSI) data with S&P 500 data for a 15 year period. The results were nothing short of remarkable:
a) The cumulative, model-free returns, expressed as the value of $100 invested from April 2000 through June 2014 grew to $618 (+518%) compared to 31% growth in S&P 500
b) The other key finding was how consistently the customer satisfaction portfolio beat the S&P returns on an annual basis. In 14 out the 15 years of the study, the customer satisfaction portfolio did better than the broader index except in the year 2013.
To see if the effects of customer satisfaction to generate outsized stock returns is replicable across markets, the researchers checked the data for United Kingdom which has a similar customer satisfaction Index called NCSI-UK.
I had done a blog post on this and tried to apply this for the Indian market:
The reason I posted here is :
A) Need feedback / thoughts on this strategy for the Indian market.
B) I had great difficulty getting customer satisfaction data for the Indian market. Please share any reliable sources for data across any Industry / Sector. This will help further validate the findings.
PS: Mods, If the topic is inappropriate or wrongly categorized, Kindly excuse. Still finding my feet around here. Please delete / re-categorize appropriatelly:pray: