CHA{TER 1

Name___________________________________

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) An Oracle Corporation study concludes that ultimately there are only two things that can give a company
long-term, sustainable advantage in the marketplace:
A) a company's culture and the relationships it fosters with customers.
B) good working conditions and generous pay.
C) lowest prices and location.
D) best value and highest quality of products.

2) A typical company will lose 10 to 30% of its customers over what period of time?
A) about ten years B) every 5 years
C) during the life of the company D) each year

3) Customer loyalty manifests itself in key customer behaviors including:

A) repeat buying (or the intention to do so).
B) resistance to switch to a competitor.
C) willingness to recommend the company to others.
D) All of the above must be present for customer loyalty.

4) The Gallup polling organization describes customer ________ as a critical variable in building loyalty.
A) generosity B) engagement C) tech-savvy D) involvement

5) E-commerce has affected customer service by:

A) reducing the need for good face-to-face transactions.
B) eliminating the need to write a letter to complain.
C) making spreading the word about service experiences easier than ever.
D) reducing the impact of complaint web sites since there are now so many of them.

6) Customer loyalty is sometimes mistaken for:

A) customer satisfaction alone. B) repeat buying alone.
C) a large share of the market. D) All of the above.

TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
7) Online merchant Zappos.com has a very sophisticated system that measures the speed of call handling in an
effort to make each customer call as brief as possible.
Answer: True False

8) In a broad sense, a customer can be described as anyone with whom we exchange vale.
Answer: True False

9) Word of mouth "advertising" can be helpful in selling products but has less of a role in customer service.
 Answer: True False

10) So-called "ripple effects" of bad service are less damaging today than they once were.
Answer: True False

11) Applying principles of good service will make you feel better about your life and yourself even if you are
"just an employee."
Answer: True False

12) When employees are empowered they have additional authority to make decisions that benefit the customer,
often without getting higher management approval.
Answer: True False

13) Service intimacy tends to grow over time as the relationship with customers evolves.
Answer: True False