Which of the following is TRUE?
A) As customer loyalty increases, customers are more sensitive to price increases.
B) Customer loyalty has a positive relationship with firm profitability.
C) Customer loyalty is fragile and cannot reliably be considered a factor in firm success.
D) Customer loyalty is of importance only to firms using a differentiation strategy.

Question

Quizplus · Accepted Answer

Customer loyalty has been found to have a positive relationship with firm profitability as loyal customers are likely to make repeated purchases and possibly refer others to the business. Option A is incorrect because as customer loyalty increases, customers become less sensitive to price increases. Option C is incorrect because customer loyalty is an important factor in firm success and can lead to sustainable competitive advantage. Option D is incorrect because customer loyalty is important for firms using both differentiation and cost leadership strategies.

Which of the Following Is TRUE