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Exam 16: The Financial and Economic Impact of Service

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Question 31

True/False

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Attracting a new customer is five times as costly as retaining an existing one.

A) True
B) False

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Question 32

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In 1991 when the US.General Accounting Office (GAO) studied the financial effect of service quality on companies that had won the Malcolm Baldrige National Quality Award,it determined that these elite quality firms benefited in all of the following ways EXCEPT:

A) Increased market share
B) Improved return on sales
C) Improved sales per employees
D) Increased return on assets
E) Increased advertising

F) A) and D)
G) A) and E)

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Question 33

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Many companies that have adopted a customer retention strategy are now using the extent of _________ as their main measure of customer loyalty.

The comment card that is often found on the tables at a Wendy's fast-food restaurant asks about the customer's perceptions of the quality of the food,its cleanliness and the friendliness of the employees.These questions are focusing on _____ in Wendy's balanced performance scorecard.

The ROSQ approach would be appropriate for a service provider:

The operational measures used within the balanced performance scorecard should be:

Why have managers replaced traditional tools for measuring a company's performance with the balanced scorecard?

Service quality,like advertising,has a cumulative effect on a company's profit.

The owner of Fiori Flower and Gift Shop has noticed a gradual decline in its number of customers over the last three years.The owner suspects that many of its regular customers are now buying flowers at the newly opened Kroger supermarket.It would be appropriate for the owner to institute _____ marketing.

The research exploring the relative importance of service dimensions on overall service quality or customer satisfaction has confirmed _____ as the most critical dimension.

FedEx measures customer satisfaction and service quality with a 12-item statistical measure called the Service Quality Indicator.One of the items measured by FedEx is the number of missed pickups per day.In a balanced performance scorecard,the number of missed pickups per day would represent a(n) _____ measure.

Many companies do not identify and act on the correct non-financial measures.One mistake the companies make is _______ that involves not laying out the cause-and-effect relationships between drivers and strategic success.

All of the following are customer perceptual measures within the balanced performance scorecard EXCEPT:

Describe the innovation and learning area of the balanced performance scorecard including some of the specific measures that may be appropriate for this area.

There are several auto repair shops in a three-block area on King Street.One of the shop owners decided to extend her shop's operating hours until 10 p.m.Monday-Thursday and provide a pick-up and delivery service with bonded drivers as well as guarantee all repairs for six months.This job owner is engaged in _____ marketing.

Many companies do not identify and act on the correct non-financial measures.One of the four major mistakes that companies make is _______.In other words,companies attempt to measure complex phenomenon with one or two simple measures or use quantitative metrics to capture qualitative results for factors such as leadership.

All of the following are financial measures used in the balanced performance scorecard EXCEPT:

What area of the balanced performance scorecard is a company studying when it examines transaction time,throughput time,reduction in waste and process quality?

The key drivers of service quality,customer retention and profits include:

Service encounters are among the key drivers of service quality.