This study examines the nonlinear relationship between customer satisfaction (CS) and both the levels and growth of customer revenue (CR) at the individual level in the banking sector. Utilizing a unique data on 19,054 Swedish bank customers (2013–2017), the analysis combines subjective satisfaction measures with objective financial and demographic register data. Regression models test for diminishing returns at high satisfaction levels while assessing the persistence of these effects over a four-year period. The findings indicate that while CS is positively associated with both revenue level and revenue growth, the relationship with revenue level is nonlinear. Specifically, customers scoring 80–89 generate higher revenues than those scoring 90–100, providing weak evidence of a ceiling effect (at the 10% significance level) that is notably absent for revenue growth. Furthermore, CS explains less than 1% of revenue variation, highlighting the inherent limits of satisfaction-based revenue models. These ceiling effects are more pronounced among older, lower-income women without debt, whereas wealth has no observable impact. Finally, the nonlinear effects fade after one year, though gender remains a consistent moderator. These tentative findings suggest limited financial returns from maximizing satisfaction, thereby supporting the implementation of more differentiated customer segmentation strategies.
Hermansson et al. (Sat,) studied this question.