Question 1

It is important for profit-making firms to narrow the gap between actual and potential customer value.

Accepted Answer

A) True 
 B)False  False

Question 2

Which of the following is NOT one of the factors underlying profit growth?

Accepted Answer

A) Opportunities to cross-sell other company services 
B) Reduced operating costs 
C) Increased purchases 
D) Positive word of mouth advertising 
E) None of the above 
A) Opportunities to cross-sell other company services 
B) Reduced operating costs 
C) Increased purchases 
D) Positive word of mouth advertising 
E) None of the above E

Question 3

High net-worth customers should be protected because:

Accepted Answer

A) they make few demands on the organisation 
B) relationships cannot be built with them 
C) they cost little to service 
D) a and c 
E) a, b and c 
A) they make few demands on the organisation 
B) relationships cannot be built with them 
C) they cost little to service 
D) a and c 
E) a, b and c D

Question 4

Having details of regular customers in the firm's database offers opportunities to:

Accepted Answer

A) reduce operating costs 
B) increase purchases 
C) have lower maintenance costs 
D) cross-sell other company services 
E) a and c 
A) reduce operating costs 
B) increase purchases 
C) have lower maintenance costs 
D) cross-sell other company services 
E) a and c

Question 5

Active management of the customer base and customer loyalty is referred to as:

Accepted Answer

A) customer churn 
B) customer asset management 
C) customer loyalty management 
D) customer relationship management 
E) customer lifetime management 
A) customer churn 
B) customer asset management 
C) customer loyalty management 
D) customer relationship management 
E) customer lifetime management

Question 6

Customers can be arranged in tiers according to:

Accepted Answer

A) different levels of profit contribution 
B) customer needs 
C) identifiable personal profiles such as demographics 
D) price sensitivity 
E) all of the above 
A) different levels of profit contribution 
B) customer needs 
C) identifiable personal profiles such as demographics 
D) price sensitivity 
E) all of the above

Question 7

Companies develop churn diagnostics and alert systems so they can implement pre-emptive strategies to reduce customer defections.

Accepted Answer

A) True 
 B)False

Question 8

CRM is an all-encompassing management tool that uses technology to eliminate many of the problems associated with non-computerised methods.Discuss.

Accepted Answer

Customer Relationship Management (CRM) i

Question 9

Economic benefits of customer loyalty often explain why one firm is more profitable than a competitor.However, profitable revenue streams are unlikely to apply equally in all industries.Long-term customer value is less likely to be significant when:

Accepted Answer

A) there are low margins on sale 
B) there are high margins of sale 
C) high marketing costs are required to obtain a new customer 
D) there is a high sales volume per customer 
E) there is a high word of mouth referral 
A) there are low margins on sale 
B) there are high margins of sale 
C) high marketing costs are required to obtain a new customer 
D) there is a high sales volume per customer 
E) there is a high word of mouth referral

Question 10

For the online wine club in Question 1 and the upscale hairdressing salon in Question 2, discuss the benefits to the companies from retaining the long-term customers.

Accepted Answer

For the online wine club, retaining long

Question 11

Which of the following best describe(s) loyal customers?

Accepted Answer

A) They continue to patronise a firm over the long term 
B) Often patronise particular firms exclusively 
C) Recommend a firm and its services to friends 
D) Cost more to service than one-off customers 
E) All of the above except d 
A) They continue to patronise a firm over the long term 
B) Often patronise particular firms exclusively 
C) Recommend a firm and its services to friends 
D) Cost more to service than one-off customers 
E) All of the above except d

Question 12

The costs of acquiring a new service customer are always high.

Accepted Answer

A) True 
 B)False

Question 13

Why should managers think carefully about operational elements such as speed, quality and physical features of its services when targeting customers?

Accepted Answer

A) They need to convince customers of the services' quality. 
B) They need to focus on their operations, not on customers. 
C) They need to target customers who match the firm's capabilities. 
D) They need to figure out how all customers can be a good fit with the firm's capabilities. 
E) They need to figure out how they can serve all customers equally well. 
A) They need to convince customers of the services' quality. 
B) They need to focus on their operations, not on customers. 
C) They need to target customers who match the firm's capabilities. 
D) They need to figure out how all customers can be a good fit with the firm's capabilities. 
E) They need to figure out how they can serve all customers equally well.

Question 14

According to Dowling and Uncles (1997), heavy users are not always committed or exclusively loyal to one seller.They refer to this as:

Accepted Answer

A) spurious loyalty 
B) undivided loyalty 
C) multiple seller loyalty 
D) polygamous loyalty 
E) heterogeneous loyalty 
A) spurious loyalty 
B) undivided loyalty 
C) multiple seller loyalty 
D) polygamous loyalty 
E) heterogeneous loyalty

Question 15

Customers remain loyal to service firms that provide them with confidence, social or special-treatment benefits.

Accepted Answer

A) True 
 B)False

Question 16

The use of segmentation allows organisations to reward valued customers and discourage less profitable customers.

Accepted Answer

A) True 
 B)False

Question 17

If a firm has an emphasis on relationship marketing they are concerned with:

Accepted Answer

A) regaining lost customers 
B) offering reduced prices 
C) implementing effective service-recovery 
D) implementing effective complaint-handling 
E) a, c and d 
A) regaining lost customers 
B) offering reduced prices 
C) implementing effective service-recovery 
D) implementing effective complaint-handling 
E) a, c and d

Question 18

The aim of discounts and frequent user schemes is more to lock the customer in than give them a bonus.

Accepted Answer

A) True 
 B)False

Question 19

Companies have been moving from focusing on customer ________ and ________ towards a customer ________ focus.

Accepted Answer

A) service; delivery; revenue generating 
B) acquisition; transaction; relationship 
C) acquisition; service delivery; retention 
D) service delivery; satisfaction; marginal costing 
E) costs; revenue; relationship 
A) service; delivery; revenue generating 
B) acquisition; transaction; relationship 
C) acquisition; service delivery; retention 
D) service delivery; satisfaction; marginal costing 
E) costs; revenue; relationship

Question 20

The cost to attract a new customer is reported to be ________ times the cost to retain a current customer.

Accepted Answer

A) four to five 
B) five to six 
C) six to seven 
D) seven to eight 
E) eight to nine 
A) four to five 
B) five to six 
C) six to seven 
D) seven to eight 
E) eight to nine

It is important for profit-making firms to narrow the gap between actual and potential customer value.

Which of the following is NOT one of the factors underlying profit growth?

High net-worth customers should be protected because:

Having details of regular customers in the firm's database offers opportunities to:

Active management of the customer base and customer loyalty is referred to as:

Customers can be arranged in tiers according to:

Companies develop churn diagnostics and alert systems so they can implement pre-emptive strategies to reduce customer defections.

CRM is an all-encompassing management tool that uses technology to eliminate many of the problems associated with non-computerised methods.Discuss.

Economic benefits of customer loyalty often explain why one firm is more profitable than a competitor.However, profitable revenue streams are unlikely to apply equally in all industries.Long-term customer value is less likely to be significant when:

For the online wine club in Question 1 and the upscale hairdressing salon in Question 2, discuss the benefits to the companies from retaining the long-term customers.

Which of the following best describe(s) loyal customers?

The costs of acquiring a new service customer are always high.

Why should managers think carefully about operational elements such as speed, quality and physical features of its services when targeting customers?

According to Dowling and Uncles (1997), heavy users are not always committed or exclusively loyal to one seller.They refer to this as:

Customers remain loyal to service firms that provide them with confidence, social or special-treatment benefits.

The use of segmentation allows organisations to reward valued customers and discourage less profitable customers.

If a firm has an emphasis on relationship marketing they are concerned with:

The aim of discounts and frequent user schemes is more to lock the customer in than give them a bonus.

Companies have been moving from focusing on customer and towards a customer focus.

The cost to attract a new customer is reported to be ________ times the cost to retain a current customer.

Marketing in the service economy

Customer behaviour, culture and service encounters

Positioning services in competitive markets

Developing service products: core and supplementary service elements

Distributing services through physical and electronic channels

Understanding costs and developing pricing strategy

Balancing productive capacity and demand

Integrated services marketing communications

Managing people for service advantage

Crafting the service environment

Managing the customer service function

Customer satisfaction and service quality

Handling customer complaints and managing service recovery

Filters

Exam 13: Managing relationships and building loyalty

It is important for profit-making firms to narrow the gap between actual and potential customer value.

Which of the following is NOT one of the factors underlying profit growth?

High net-worth customers should be protected because:

Having details of regular customers in the firm's database offers opportunities to:

Active management of the customer base and customer loyalty is referred to as:

Customers can be arranged in tiers according to:

Companies develop churn diagnostics and alert systems so they can implement pre-emptive strategies to reduce customer defections.

CRM is an all-encompassing management tool that uses technology to eliminate many of the problems associated with non-computerised methods.Discuss.

Economic benefits of customer loyalty often explain why one firm is more profitable than a competitor.However, profitable revenue streams are unlikely to apply equally in all industries.Long-term customer value is less likely to be significant when:

For the online wine club in Question 1 and the upscale hairdressing salon in Question 2, discuss the benefits to the companies from retaining the long-term customers.

Which of the following best describe(s) loyal customers?

The costs of acquiring a new service customer are always high.

Why should managers think carefully about operational elements such as speed, quality and physical features of its services when targeting customers?

According to Dowling and Uncles (1997), heavy users are not always committed or exclusively loyal to one seller.They refer to this as:

Customers remain loyal to service firms that provide them with confidence, social or special-treatment benefits.

The use of segmentation allows organisations to reward valued customers and discourage less profitable customers.

If a firm has an emphasis on relationship marketing they are concerned with:

The aim of discounts and frequent user schemes is more to lock the customer in than give them a bonus.

Companies have been moving from focusing on customer ________ and ________ towards a customer ________ focus.

The cost to attract a new customer is reported to be ________ times the cost to retain a current customer.

Marketing in the service economy

Customer behaviour, culture and service encounters

Positioning services in competitive markets

Developing service products: core and supplementary service elements

Distributing services through physical and electronic channels

Understanding costs and developing pricing strategy

Balancing productive capacity and demand

Integrated services marketing communications

Managing people for service advantage

Crafting the service environment

Managing the customer service function

Customer satisfaction and service quality

Handling customer complaints and managing service recovery

Filters

Companies have been moving from focusing on customer and towards a customer focus.