Deck 14: Strategies for Facilitating Customer Loyalty Retention

Question 1

Which one of the following statements is incorrect?

A) One of the key benefits of customer retention is repeat sales.
B) Existing customers are willing to pay more for a firm's services.
C) It costs 3 to 5 times more to keep a customer than to get a new one.
D) Long-term customers tend to have lower maintenance costs
E) Customer retention often leads to positive referrals.

Answer 1

It costs 3 to 5 times more to keep a customer than to get a new one.

Question 2

Credit card companies have found that customer retention leads to:

A) profits from increased purchases and higher balances
B) profits from reduced operating costs
C) profits from referrals
D) profit from price premiums
E) all the above

Answer 2

all the above

Question 3

The strategy for cultivating customer loyalty that refers to protecting confidential information and telling the customers the truth, even when it hurts is:

A) maintaining the proper perspective
B) providing discretionary effort
C) monitoring the service delivery process
D) building trusting
E) remembering the customers between calls

Answer 3

building trusting

Question 4

Which of the following is an aftermarketing technique?

A) identifying customers and building a customer database
B) measuring customer satisfaction
C) establishing formal customer communication programs
D) maintaining a relationship with the customer after the initial sale
E) all of the above

Question 5

Which of the following is not an organization-directed benefit associatedwith offering unconditional guarantees?

A) the guarantee forces the firm to focus on the customer's definition of goodservice
B) the guarantee states a clear performance goal that is communicated toemployees
C) offering the guarantee forces the firm to examine its entire service deliverysystem for failure points
D) the guarantee can be a source of pride and provide a motive for teambuilding within the firm
E) all the above

Question 6

According to the text, the least loyal defector type are:

A) price defectors
B) product defectors
C) service defectors
D) market defectors
E) technological defectors

Question 7

According to the text, the most difficult type of defector to bring back once theyleave are:

A) price defectors
B) product defectors
C) service defectors
D) market defectors
E) technological defectors

Question 8

When some cargo shippers switch form rail carriers to air transportation, thiswould be classified as which type of defectors?

A) price defectors
B) product defectors
C) service defectors
D) market defectors
E) technological defectors

Question 9

Customers who defect due to reciprocal buying arrangements with another firm would be classified as which type of defectors?

A) price defectors
B) organizational defectors
C) service defectors
D) market defectors
E) technological defectors

Question 10

The defection management process includes all of the following steps except:

A) creating a zero defections culture within the firm
B) minimizing service guarantee payouts
C) training employees in defection management
D) tieing incentives to reduce defection rates
E) creating switching barriers that discourage defections