1. Managers who believe the customer is the company’s only true “profit center” consider the traditional organization chart to be obsolete.

1. Managers who believe the customer is the company’s only true “profit center” consider the traditional organization chart to be obsolete.

2. The modern customer-oriented organization chart places top management at the top of the pyramid as long as they can think like consumers.

3. There are two determinates of customer-perceived value: total customer benefit and total customer cost.

4. Customer-perceived value is the perceived monetary value of all the purchases a customer makes on an annual basis.

5. Consumers tend to be value maximizes—they estimate which offer will deliver the most perceived value and act on it.

6. At the heart of a good value delivery system is a set of core business processes that help to deliver distinctive customer value.

7. Professional buyers and purchasing agents operate under various constraints and occasionally make choices that give more weight to their personal benefit than to the company’s benefit.

8. The value proposition is stated in the price of a product and readily recognized by the average consumer.

9. The value delivery system includes all the experiences the customer will have on the way to obtaining and using the offering.

10. P
For a consumer to be delighted with a product or service he or she must perceive that performance exceeds expectations.

11. The ultimate goal of the customer-centered firm is to create high customer satisfaction.

12. One key to customer retention is customer satisfaction.

13. Consumers’ expectations result exclusively from past buying experiences.

14. A highly satisfied customer generally stays loyal longer, pays less attention to competing brands, and is less sensitive to price.

15. Price perception is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.

16. Conformance quality and performance quality is essentially the same thing in a marketing sense.

17. Two products with very different performance qualities can have the same conformance quality if both products deliver their respective promised quality.

18. Marketers have found that pricing plays the most essential role in defining and delivering high-quality goods and services to target customers.

19. The midsize customers for most organizations receive good service, pay nearly full price for the products and services they purchase, and are often the most profitable.

20. A profitable customer is a person, household, or company that over time yields a revenue stream that exceeds by an acceptable amount the company’s cost stream of attracting, selling, and servicing the customer.

21. The best thing a company can do in the face of company mistakes is to discourage the customer from complaining.
Quality is the key to value creation and customer satisfaction.

22. The least profitable 10% to 20% of customers can reduce profits by 50% to 200% per account.

23. Most companies measure customer satisfaction and individual customer profitability.

24. Unprofitable customers who defect to a competitor should be encouraged to do so.

25. Customer profitability analysis (CPA) is best conducted with the tools of an accounting technique called activity-based costing (ABC).

26. According to customer profitability analysis (CPA), platinum customers spend the most money with the organization, thereby making them valuable.

27. Customer lifetime value (CLV) describes the net present value of the stream of future profits expected over the customer’s lifetime purchases.

28. A good illustration of a personal touch in the hotel business would be if the hotel employees (e.g., registration, maid service, et cetera) call a guest by his or her name.

29. A customer touch point is the time when the customer makes a purchase.

30. The aim of customer relationship management is to keep the costs of meeting and tracking consumers as low as possible.

31. All companies should practice one-to-one marketing.

32. A key driver of shareholder value is the aggregate value of the customer base.

33. Customer churn is how rapidly a store can move customers through its checkout facility or process.

34. The average company loses 25% of its customers each year.

35. A customer database is simply a listing of a customer’s name, address, and phone number for credit reference.

36. It’s often easier to reattract ex-customers (because the company knows their names and histories) than to find new ones.

Answer: True

37. Cluster analysis is a good example of a statistical technique that might be employed in datamining.

38. It always costs less to serve loyal customers than to attract new ones.

39. Database marketing is most frequently used by business marketers and service providers (hotels, banks, airlines, and insurance, credit card, and telephone companies) that normally and easily collect a lot of customer data.

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