The asymmetric relationship between attribute-level performance and overall customer satisfaction: a reconsideration of the importance–performance analysis Kurt Matzler a, * , Franz Bailom b,1 , Hans H. Hinterhuber a,2 , Birgit Renzl a,3 , Johann Pichler b,1 a Department of General and Tourism Management, University of Innsbruck, Universita ¨tsstrasse 15, A-6020 Innsbruck, Austria b Innovative Management Partner (IMP), Rennweg 23, A-6020 Innsbruck, Austria Received 1 February 2002; received in revised form 1 November 2002; accepted 1 March 2003 Abstract The importance–performance analysis (IPA) is a widely used analytical technique that yields prescriptions for the management of customer satisfaction. IPA is a two-dimensional grid based on customer-perceived importance of quality attributes and attribute performance. Depending on the interplay of these two dimensions, strategies for satisfaction management can be derived. As theoretical and empirical work has shown, the relationship between attribute-level performance and overall satisfaction is asymmetric. These findings call into question the applicability of IPA. In this paper, an empirical study on customer satisfaction with a supplier in the automotive industry was undertaken. Using a regression analysis with dummy variables, the asymmetric relationship between attribute-level performance and overall satisfaction could be confirmed. Furthermore, it is shown empirically that the managerial implications derived from an IPA are misleading. Consequently, the traditional IPA needs to be revised. D 2003 Elsevier Inc. All rights reserved. Keywords: Importance – performance analysis; Customer satisfaction; Perceived quality 1. Introduction Without question, quality and customer satisfaction are key drivers of financial performance. It is argued that satisfaction leads to increased loyalty, reduced price elasti- city, increased cross-buying, and positive word of mouth. Numerous empirical studies confirm a positive relationship between customer satisfaction and profitability (e.g., Ander- son, Fornell, & Lehmann, 1994; Eklo ¨f, Hackl, & Westlund, 1999; Ittner & Larcker, 1998). In industrial markets, the importance of assessing and managing customer satisfaction is widely recognized (e.g., Tikkanen, Alajoutsija ¨rvi, & Ta ¨htinen, 2000). It is crucial to identify the critical factors that determine satisfaction and loyalty. Each company, however, is constrained by limita- tions on the resources they have available. Therefore, it must be decided how scarce resources are best deployed to achieve the highest level of satisfaction. An effective method to set priorities is importance–performance ana- lysis (IPA). It analyses quality attributes on two dimen- sions: their performance level (satisfaction) and their importance to the customer. Evaluations of attributes on these two dimensions then are combined into a matrix that allows a firm to identify key drivers of satisfaction, to formulate improvement priorities, and to find areas of possible overkill and areas of ‘‘acceptable’’ disadvantages. In practice, IPA is considered a simple but effective tool (e.g., Hansen & Bush, 1999). It is very helpful in deciding how to best allocate scarce resources in order to maximize satisfaction. 0019-8501/03/$ – see front matter D 2003 Elsevier Inc. All rights reserved. doi:10.1016/S0019-8501(03)00055-5 * Corresponding author. Tel.: +43-512-507-7185; fax: +43-512-507- 2968. E-mail addresses: kurt.matzler@uibk.ac.at (K. Matzler), f.bailom@imp.at (F. Bailom), hans.hinterhuber@uibk.ac.at (H.H. Hinterhuber), birgit.renzl@uibk.ac.at (B. Renzl), f.bailom@imp.at (J. Pichler). 1 Tel.: + 43-512-580010; fax: + 43-512-580010-18. 2 Tel.: + 43-512-507-7181; fax: + 43-512-507-2968. 3 Tel.: + 43-512-507-7191; fax: + 43-512-507-2968. Industrial Marketing Management 33 (2004) 271 – 277