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 the differentiation strategy.

Question

Quizplus · Accepted Answer

Customer loyalty has been shown to have a positive relationship with firm profitability. This is because loyal customers can increase revenue through repeat purchases, positive word-of-mouth referrals, and willingness to pay premium prices for products or services. Option A is incorrect because as customer loyalty increases, customers are less sensitive to price increases. Option C is incorrect because customer loyalty, when properly fostered, can be a significant factor in a firm's success. Option D is incorrect because customer loyalty is important to firms using any type of business strategy, not just differentiation.

Which of the Following Is TRUE