Deck 7: Developing Customer Loyalty

Question 1

The relationship between satisfaction and loyalty is strongest when satisfaction is high.

Answer 1

True

Question 2

The goal of relationship marketing is to enhance physician satisfaction, and then patient satisfaction.

Answer 2

False

Question 3

Loyalty rather than satisfaction is the key end state for marketers and organizations to achieve with customers.

Answer 3

True

Question 4

The lifetime value of a customer is how much the person spends or is worth over an unlimited time span beyond the first purchase.

Question 5

If the first encounter with an organization meets the customer's expectations, the customer will be satisfied.

Question 6

The lower levels of the Customer Loyalty Pyramid are based on an organization's promotional strategy.

Question 7

In many customer-company interactions, loyalty and satisfaction are the same.

Question 8

Satisfaction is an antecedent of loyalty.

Question 9

In an era of Omni channel marketing, a limitation of patient satisfaction surveys is that they do not assess patient motivations or behaviors.

Question 10

The linkage between satisfaction and loyalty has been found to be weaker for high-satisfaction hospitals.

Question 11

The two key components of loyalty are customer retention and share of customer usage.

Question 12

A major advantage of loyal customers in service businesses is that they will tolerate the occasional bad service encounter instead of leaving the organization.

Question 13

Loyalty has a positive effect on profitability and decreases costs.

Question 14

In health care more than any other industry, customer expectations with regard to value are constantly rising.

Question 15

A key variable in the value equation is the service delivery cost.

Question 16

In the value equation, process quality in a healthcare situation represents the ease with which a customer can access clinical quality.

Question 17

Empathy is a component of service acquisition cost in the value equation.

Question 18

When conducting a gap analysis, the "walks the talk" gap is the one that occurs between service quality expectations and management perceptions of those expectations.

Question 19

In conducting a gap analysis, the gap related to resources is the one between service quality specifications and service delivery.

Question 20

Research has found that when boundary tier workers report positive work attitudes, customers report high satisfaction levels.

Question 21

A service blueprint charts all steps in delivering the service to the customer that can be seen by the customer.

Question 22

Conducting a medical service blueprint can be used to identify where bottlenecks exist in service delivery or areas for efficiency improvement.

Question 23

When an organization assesses customer feedback, it always must improve service in any contact point where it does not exceed expectations.

Question 24

A customer recovery system is an organized approach to bringing back every customer who has decided to shift their business to a competitor.

Question 25

Having each service provider at each level of service delivery use a defined script in dealing with a customer problem is a key component of an effective customer recovery system.

Question 26

Zero defects is a goal of production businesses and should be the goal of every service business when dealing with customers.

Question 27

A major reason the majority of customers leave a business is because of benign neglect by the organization.

Question 28

For an effective customer service recovery system, front-line staff must be empowered to act on customer complaints and problems.

Question 29

The loyalty of customers who have a problem but have experienced a successful recovery is greater than those who never had a problem.

Question 30

One form of justice demanded by consumers is operational justice.

Question 31

Interpersonal dimensions of the complaint between the service provider and the customer is referred to as interactional fairness.

Question 32

Outcome fairness is when consumers cite the inconvenience of getting a complaint process moving.

Question 33

The service recovery paradox shows it is good for a company to have service failure.

Question 34

Actions an individual must take to achieve the greatest healthcare benefits available to them is:

A) service maximization.
B) benefit determination.
C) engagement.
D) service selection determination.

Question 35

The importance of service process quality is best seen in health care because:

A) customers want to have easy access in every service situation.
B) many medical malpractice suits have no clinical reason but have been a function of how the service was delivered.
C) the process quality affects consumer perception of the price-value relationship.
D) in the era of transparency metrics are being developed on service process quality.

Question 36

An ACO provides a local employer with quarterly health status reports of individuals who are employed by the company and receive health care coverage from the ACO. Although the individuals' identities are not revealed, the ACO provides general health status reports regarding smoking cessation participation, diabetes monitoring, and blood pressure, as well as the mammogram compliance for female employees who are of eligible age. This proactive approach is an example of:

A) service process quality.
B) value-added benefits.
C) opportunity cost minimization.
D) total care maximization.

Question 37

A "customer-back" approach to creating a customer-centric organization means:

A) focusing the organization's structure to develop responses to the customer's needs.
B) building a structure in which financial efficiency and the organization's priorities are aligned for efficient utilization.
C) identifying customer wants and aligning the organization priorities around those needs.
D) None of these is correct.

Question 38

Why has loyalty become an important strategy for healthcare organizations in today's environment?

A) Health care reform
B) Challenge of pay-for-performance contracts
C) The need to establish relationships so that the hospital is not financially penalized based on negative HCAHPS evaluations
D) All of these are correct.

Question 39

Spurious loyalty is best viewed as a:

A) customer who buys a product when his favorite brand is not available.
B) customer buying a product because of convenience or familiarity.
C) random purchase by a customer of a product.
D trial purchase of a product that may lead to loyalty if it meets expectations.

Question 40

In gap analysis, the "walk the talk" gap often occurs when:

A) customers' service quality expectations and management's perceptions of those expectations do not line up.
B) management's perceptions of customer expectations and service quality specifications do not line up.
C) actual service delivery does not meet the promise that was made to customers in the marketplace.
D) None of these is correct.

Question 41

When boundary employees work for companies in which they report generally positive work attitudes, customers report:

A) greater loyalty.
B) cost savings.
C) greater satisfaction.
D) higher purchase rates across service lines.

Question 42

In a service blueprint, an organization:

A) audits each market segment relative to its lifetime value.
B) audits the organization relative to its customers' use of its services.
C) determines how to deliver its services most efficiently.
D) creates a flow chart of every step in the delivery of the service.

Question 43

"Moments of truth" are:

A) points when the customer directly interacts with the service.
B) points when clinician must be honest about the patient diagnosis.
C) the most critical points in the service delivery process.
D) points in service delivery where the customer evaluates the price-value relationship.

Question 44

Leverage opportunities are those contact points that are:

A) important to the customer but do not meet expectations.
B) important to the customer and exceed expectations.
C) not important to the customer and do not meet expectations.
D) not important to the customer and exceed expectations.

Question 45

An organized script for people to address service delivery failures with customers is referred to as a:

A) customer problem system.
B) customer recovery system.
C) customer failure system.
D) customer fail-safe system.

Question 46

Which of the following is not true for effective service recovery?

A) The front-line service personnel must be empowered.
B) Problems or failures with the service must be classified.
C) Problems must be solved.
D) Problems must be appropriately identified.

Question 47

Research has found that compared with satisfied customers, dissatisfied customers:

A) engage in greater word of mouth.
B) are more likely to be switchers.
C) really never switch in spite of complaining.
D) are easy to convert back to satisfied customers.

Question 48

It is most difficult to recover a dissatisfied customer when:

A) The customer complains and receives a slow response from customer service.
B) The customer complains and receives an explanation but no other compensation.
C) The customer does not complain because they view the problem as systematic and uncontrollable.
D) The customer does not complain because the organization does not ask for feedback.

Question 49

Effective recovery has been found to enhance:

A) profitability.
B) customer interest.
C) customer engagement.
D) trust.

Question 50

Which of the following is not one of the three forms of fairness?

A) Procedural
B) Operational
C) Interactional
D) Outcome

Question 51

When the customer gets what they expect after they complain, this is an example of:

A) outcome fairness.
B) operational fairness.
C) procedural fairness.
D) interactional fairness.

Question 52

The service recovery paradox shows that:

A) when an organization recovers, it does not increase satisfaction.
B) loyalty can increase even when service is low.
C) when there is a service failure with effective recovery, loyalty can increase.
D) loyalty can increase as long as service-level performance is high.