Deck 4: Relationshiployalty Marketing

Question 1

According to TARP, if complaints are resolved quickly, complainants are more likely to make repeat purchases.

Answer 1

True

Question 2

Relationship/loyalty marketing is applicable when there is an ongoing and periodic desire for service by the customer.

Answer 2

True

Question 3

Commitment is the belief that an ongoing relationship is so important that the partners are willing to work at maintaining it and are willing to make short-term sacrifices to realize long-term benefits.

Answer 3

True

Question 4

The value portion of the the loyalty circle has two components: value added and value.

Question 5

A frequency program focuses on the long term business of customers.

Question 6

In loyalty marketing, customers are considered valuable assets with whom business should develop an ongoing relationship.

Question 7

The final rung of the customer loyalty ladder is repeat customers.

Question 8

The lifetime value of a customer is the net profit received from doing business with a given customer during that time that the customer continues to buy from you.

Question 9

Relationship/loyalty marketing is not applicable when there are alternative supplier choices.

Question 10

The loyalty circle includes process, value, communication and education.

Question 11

On the loyalty ladder, you want to move customers from the advocate stage to the repeat customer stage.

Question 12

The first two rungs of the customer loyalty ladder are suspects and prospects.

Question 13

Worksheets cannot be developed for calculating the lifetime value of a customer.

Question 14

The strategy for prospects is to tailor the service to their needs.

Question 15

Worksheets and formulas cannot be used to determine the lifetime value of a customer.

Question 16

The evolution of building loyalty diagram moves from strategic to tactical as it proceeds from left to right.

Question 17

There is a school of thought that believes the quality of market share measured in terms of customer loyalty deserves the same attention as the quantity of market share.

Question 18

Trust is an antecedent of loyalty because the customer trusts the organization to do the things that it is supposed to do, implicitly or explicitly.

Question 19

Relationship marketing and cultivating and maintaining customer relationships are something like a marriage: both parties have to get something.

Question 20

The first two rungs of the customer loyalty ladder are suspects and prospects.

Question 21

In the loyalty circle, value added features include all of the following except:

A) Experiential
B) Functional
C) Rational
D) Temporal
E) Financial

Question 22

A loyalty program is defined as:

A) A strategy undertaken by a firm to manage the three components of the loyalty circle in order to create a bond with the customer
B) The emotional and psychological factors that build real commitment
C) Both A & B
D) None of the above

Question 23

Employee relationship marketing is often referred as:

A) Loyalty marketing
B) Internal marketing
C) Relationship marketing
D) New horizon marketing

Question 24

The main function of the loyalty circle is:

A) Process
B) Communication
C) Value
D) All of the above
E) None of the above

Question 25

Frequency programs:

A) May see in increase in repeat purchases.
B) Have a behavior focus on bribery.
C) Eventually erode the brand image.
D) Both A & C
E) All of the above

Question 26

Value-recovery strategies are designed to:

A) Rectify a lapse in service delivery
B) Insure that the guest's needs are taken care of without further inconvenience
C) Insure that future service failures never occur
D) Both A & B

Question 27

Loyalty programs:

A) Are mostly about promotion.
B) Show a profit in the short term.
C) Are focused on short-term efforts.
D) Are focused on long-term efforts.
E) Both C & D

Question 28

Research shows that customers do not complain because of three main reasons. Which of the following is not one of these reasons?

A) It is not worth the time and effort
B) They believe nothing will be done even if they do complain
C) They do not know where or how to complain
D) There are not enough comment cards

Question 29

The four ways firms can handle complaints are:

A) Corrective, apologetic, passive, regressive
B) Defensive, corrective, passive, active
C) Passive, defensive, apologetic, active
D) None of the above

Question 30

Using a focus group as a means to gain information about customers is an example of a tactic used in the
part of the loyalty circle.

A) Value recovery
B) Communication
C) Process
D) Value added

Question 31

To truly practice relationship marketing, it may be necessary to:

A) Encourage customer complaints
B) Discourage customer complaints
C) Discourage customer compliments
D) Encourage customer compliments

Question 32

Major findings by TARP demonstrated that on average, of customers will complain about a problem to a front line person.

A) 25%
B) 50%
C) 15%
D) 5%

Question 33

Are frequency programs the same as loyalty programs?

A) Sometimes
B) Yes
C) No

Question 34

Customer complaints are all of the following except:

A) Advertising
B) Healthy
C) Inevitable
D) Marketing tools
E) Threats

Question 35

Establishing good customer relations involves creating an atmosphere where customers' complaints are sincerely addressed. We call this .

A) Service recovery
B) Loyalty marketing
C) Passive recovery
D) Lifetime value of a customer

Question 36

The "Tip of the Iceberg Phenomenon" is:

A) The worksheet that tracks customer complaints over a period of time
B) The basic idea that top management in an organization rarely hear complaints from customers
C) A South Korean study that shows why customers complain
D) None of the above

Question 37

Which of the following is not an essential element of a successful frequency program?

A) Sustainability
B) Advancement
C) Simplicity
D) Vital database

Question 38

When it comes to customer complaints, proactive firms believe in the adage (and book title),

A) "A Complaint Is a Gift"
B) "Service Recovery Is a Gift"
C) "A Complaint Is a Curse to Be Dealt with"
D) "One Flew Over the Cuckoo's Nest"

Question 39

Relationship/loyalty marketing can include:

A) Seeking to create new value for customers and share the value created
B) Recognizing the value of customers over their purchasing lifetimes
C) Requiring that a company define its organization to support the value that individual customers want
D) All of the above

Question 40

Relationship/loyalty marketing is most applicable when:
I. There is an ongoing and periodic desire for service by the customer
II. The service customer controls the selection of the service supplier
III. There are alternative supplier choices
IV. Customer loyalty is weak and switching is common and easy
V. Word of mouth is an especially potent form of communication about a product

A) I, II and III only
B) I, II, III, IV and V
C) I, II, III and IV only
D) II, IV and V only
E) None of the above

Question 41

The lifetime value of a customer is the fundamental reason why is/are important.

A) Complaints
B) Loyalty marketing
C) Process evaluation
D) The Tip of the Iceberg

Question 42

Discuss what relationship marketing is and what it is not.

Question 43

According to internal marketing, to create customer value the firm must create:

A) Customer awareness
B) Process value
C) Communication value
D) Employee value

Question 44

Delta Hotel's website details on employee empowerment are an example of:

A) Employees that practice internal marketing
B) Customers that demand superior service
C) Employees that practice relationship marketing
D) Management that practice internal marketing

Question 45

What does the author mean by saying that a business may need to "fire" some customers?

A) Some customers may be too costly to serve and sell
B) Not all customers are worth having
C) Some customers may be constant complainers and require too much attention
D) All of the above
E) None of the above

Question 46

The evolution of customer loyalty began with a focus on:

A) Sales
B) Frequency programs
C) Brand relationships
D) Targeted promotions

Question 47

The success of the internal marketing concept ultimately lies:

A) Within each employee
B) With loyal customers
C) With management
D) All of the above

Question 48

Which is the end and which is the means - frequent patronage or loyal patronage? Why? Discuss.

Question 49

Internal marketing may also be known as:

A) Employee relationship marketing
B) The loyalty circle
C) Employee marketing
D) The Tip of the Iceberg

Question 50

The loyalty circle is a theory about:

A) Creating loyal employees
B) Solving customer complaints
C) Creating customer loyalty
D) The loyalty among management, employees and customers

Question 51

S&H Green Stamps from the 1950s started the movement.

A) Brand relationship
B) Frequency program
C) Knowledge relationship
D) Targeted promotion

Question 52

What is the lifetime value of the customer? Why is it important? Provide examples of hospitality customers that understand this concept.

Question 53

Do frequent guest programs build loyalty?

A) Sometimes
B) No
C) Yes
D) Maybe