Question 1

Customer service does not really help the firm recover from failed service encounters.

Accepted Answer

Customer service plays a crucial role in helping a firm recover from failed service encounters. It gives the firm an opportunity to address the customer's issues, offer solutions, and apologize for any inconvenience caused. This can lead to increased customer satisfaction and loyalty.

Question 2

Supplementary services,such as customer service,cannot be used to achieve a competitive advantage in situations where the core product is considered to be a standard commodity.

Accepted Answer

Supplementary services can be used to achieve a competitive advantage even when the core product is considered a standard commodity. Good customer service, for example, can differentiate a company from competitors who may offer the same product but provide poor service.

Question 3

Customer service is sometimes referred to as a facilitating service.

Accepted Answer

Customer service is considered a facilitating service as it helps to enhance the overall customer experience and facilitate the customer's use of the product or service.

Question 4

One benefit of proactive customer service is that it can be used as an input for making service design improvements.

Accepted Answer

By gathering feedback and data from proactive customer service, companies can identify areas for improvement in their service design and make necessary changes to enhance the overall customer experience.

Question 5

A significant function of customer service is to enable the organization to recover from failures that have generated customer dissatisfaction and complaints.

Accepted Answer

Customer service plays a crucial role in addressing and resolving customer complaints and dissatisfaction, which helps in restoring the organization's image and reputation. By providing effective solutions and support to the customers, the organization can recover from failures and prevent further damage to its brand.

Question 6

In order to win customers,excellent customer service can compensate for a poor core product.

Accepted Answer

While excellent customer service can enhance customer satisfaction and loyalty, it cannot fully compensate for a poor core product, as the product's quality and functionality are fundamental to customer satisfaction and repeat business.

Question 7

An example of a customer service in a hairdressing service is a haircut.

Accepted Answer

Customer service in a hairdressing context refers to the overall experience and service provided to the customer, such as greeting customers warmly, understanding their needs, providing advice, and ensuring satisfaction. A haircut is a service offered, not an example of customer service.

Question 8

Customer service should be the responsibility of all service employees.

Accepted Answer

Customer service is not just the responsibility of those in specific customer service roles, but rather it is important for all employees to prioritize and engage in excellent customer service interactions.

Question 9

Customer complaints or suggestions are often a valuable resource that can ultimately enhance customer relationships.

Accepted Answer

Customer complaints or suggestions provide businesses with insights on areas where improvements can be made to better meet customers' needs and expectations. By addressing these concerns and making necessary changes, businesses can demonstrate their commitment to customer satisfaction and build stronger relationships with their customers.

Question 10

Enlightened service organizations anticipate the need for service recovery.

Accepted Answer

Enlightened service organizations understand that service failures can occur despite their best efforts and therefore proactively prepare for service recovery to ensure customer satisfaction and loyalty.

Question 11

Since all customers are equally attractive,a lost customer is always bad for the service organization.

Accepted Answer

Not all customers are equally attractive, as some may be more profitable or may have a higher lifetime value than others. Therefore, losing a lower-value customer may not have as much impact on a service organization compared to losing a high-value customer.

Question 12

The cost of retaining existing customers is estimated to be three to five times more expensive than it is to gain new customers.

Accepted Answer

It is generally estimated to be cheaper to retain existing customers than to acquire new ones, with the cost of acquiring new customers being five to 25 times more expensive than retaining existing ones.

Question 13

Many service organizations have comprehensive service recovery policies that are designed to restore customer franchise to its fullest.

Accepted Answer

The answer of Many service organizations have comprehensive service recovery...

Question 14

Customer service refers to all customer-provider interactions,including the proactive selling and the core product delivery,that facilitate the organization's relationship with its customers.

Accepted Answer

The answer of Customer service refers to all customer-provider interactions,including...

Question 15

A customer lifetime value approach is one way in which service organizations can predict the long-term cost of losing a customer.

Accepted Answer

Customer lifetime value (CLV) is the total estimated worth of a customer to a business over the entirety of their relationship. Knowing the CLV can help service organizations understand the potential revenue lost by losing a customer and can inform strategies to retain customers and increase their lifetime value.

Question 16

Enlightened service organizations devise plans to manage service failures.

Accepted Answer

Enlightened service organizations recognize that service failures may occur despite their best efforts and therefore develop plans to manage such failures in order to minimize their impact on customers and maintain trust and loyalty.

Question 17

Service recovery is the effort an organization expends to win back customer goodwill once it has been lost due to service failure.

Accepted Answer

Service recovery is indeed the effort an organization makes to regain customer satisfaction and trust after a service failure or a problem with their product or service. It involves acknowledging the issue, apologizing, taking prompt action to fix the problem, and potentially offering some form of compensation or gesture of goodwill to restore the customer's faith in the company. Effective service recovery can turn a dissatisfied customer into a loyal one and even generate positive word-of-mouth recommendations.

Question 18

Research suggests that reducing customer defections by as little as 5% can more than double an organization's profits.

Accepted Answer

The answer of Research suggests that reducing customer defections by...

Question 19

Even after elevating customer service to a strategic level,the information from dissatisfied customers is not considered to be a strategic organizational resource.

Accepted Answer

The statement is incorrect. Information from dissatisfied customers is considered to be a strategic organizational resource and can be used to improve customer service and overall business performance.

Question 20

Proactive customer service is a valuable information source for learning about customer needs.

Accepted Answer

Proactive customer service involves anticipating and addressing customer needs and concerns before they become problems. By doing so, companies can gather valuable feedback and insights into what customers want and need, which can be used to improve products, services, and overall customer experiences. As such, proactive customer service is an important source of information for understanding and meeting customer needs.

Quiz 11: Regaining Customer Confidence Through Customer Service and Service Recovery