1. In today's globally competitive marketplace:
A. Customers expect more, have more choices, and are less brand loyal✓
B. Customers who say they are Extremely/Very Satisfied typically account for the smallest portion of company profits
C. Customers buy only based on the packaging of the product
D. Customers expect more, have more choices, and are more brand loyal
E. Customers buy only based on affordability
2. What does DR stand for in the formula PV = 1/(1+DR)^N?
A. Discount rate✓
B. Debit receiver
C. Debit rate
D. Discount record
E. Drop rate
3. What does the 'customer compass' do?
A. Guides the flow of customers throughout the store
B. Sets its direction toward a well-defined target segment✓
C. Guides the morals of a business
D. Finds out where customers are located geographically
E. It rates the morals of high management
4. Western cultures are often criticized for:
A. Their changing environmental conditions
B. Their short-term perspective✓
C. Their customer service
D. Their long-term perspective
E. Their emerging technologies
5. Businesses with short-term perspectives usually:
A. Have strong customer focus and their managers are judged on last quarter's results
B. Have strong customer focus and always outperform competition
C. Lack focus on their investors
D. Manage their inventory more efficiently
E. Lack strong customer focus and managers are judged on last quarter's results, not long-run survival✓
6. What does the combination of low customer retention and attraction create?
A. The company must spend more on marketing and sales✓
B. A gap in the market
C. The company must spend more on innovation
D. High employee rotation
E. Allows competition to increase prices
7. What does the American Customer Satisfaction Index provide?
A. A test companies take for a 5-star rating
B. A customer satisfaction database from which managers can gain insights✓
C. A government website where customers publish feedback
D. A stamp of quality required to operate in the US
E. Compared to S&P Index for investment opportunities
8. The ACSI measures customer satisfaction for more than 200 companies in how many industries?
A. 27
B. The current top 10 industries
C. Only 1, customer service
D. 43✓
E. 35
9. When measuring customer satisfaction, what scale is better for management understanding and planning?
A. 0-100 scale✓
B. 5 stars
C. 1-7 scale
D. F to A+
E. 1-5 scale
10. What can provide a more insightful view of how a certain level of customer satisfaction is achieved?
A. Dividing CSI by number of customers
B. Multiplying CSI by number of customers
C. Averaging the CSI
D. De-averaging the CSI✓
E. Dividing CSI by months analyzed
11. What does customer retention imply?
A. Constant efforts to engage with new potential customers
B. An individual is more likely to repurchase and pay higher price due to perceived value✓
C. An individual is less likely to repurchase
D. Customers must pay a retainer when buying in bulk
E. Lowering prices to retain customers
12. What is true about the relationship between customer satisfaction index and financial/customer outcomes?
A. In more competitive markets, customers are more easily retained
B. In less competitive markets, customers are more easily retained, even with low satisfaction✓
C. It is the same across all industries
D. Though generally negative, it varies across industries
E. In less competitive markets, customers are harder to retain
13. In what type of markets can customers more easily switch between providers?
A. In less competitive markets with many options
B. In occidental markets
C. In brick-and-mortar markets
D. In highly competitive and fragmented markets✓
E. In business-to-business markets
14. Whose customer satisfaction index score should companies focus on?
A. Their own
B. Their competitors'
C. The top 10 best companies in the world
D. The top 10 in their geographical area
E. Not only their own, but also their competitors'✓
15. What is the formula CR = 1 - 1/N used for?
A. Average customer life
B. Customer retention✓
C. Future value formula
D. Present value formula
E. Customer rotation
16. What is calculated as the difference between a company's percentage of promoters and detractors?
A. The net detractor score
B. The average promoter index
C. Customer retention
D. The net promoter score✓
E. Customer value
17. Is NPS as powerful as customer satisfaction in its sales and profit impact?
A. Yes, despite limited use, NPS predicts all 5 financial metrics
B. Yes, it's a useful metric that predicts financial outcomes
C. No, WSJ determined it was a 'management fad' with no evidence of financial benefits✓
D. No, though it predicts 4 metrics like CSI, it's less powerful
E. Yes, every company should use it
18. How is customer life represented in the customer retention formula?
19. In what ways can companies capture and communicate the customer's voice?
A. Cell phone recording devices
B. Focusing on satisfied customers only
C. Focusing on dissatisfied customers only
D. Customer's voice awards
E. Customer experience, customer solutions, customer complaints✓
20. Studies show existing dissatisfied customers tell an average of how many people about their dissatisfaction?
A. 1-5
B. 8-10✓
C. 10-20
D. 5-8
E. 15-25
21. What allows businesses to track relative competitiveness in pricing, product performance, service, safety, satisfaction, and loyalty?
A. Following American Customer Alliance protocols
B. Middle management understanding key critiques
C. Senior executives understanding key competitors and competitive forces✓
D. Applying average customer life formula
E. Short-term perspective
22. The marketing cost of retaining customers is:
A. Much lower than the cost of replacing them✓
B. Much higher than the cost of replacing them
C. Same as the cost of replacing them
D. Priceless
E. Decreases every year
23. What is a critical component in the profitability equation but often overlooked in financial analyses?
A. Sales
B. The inventory
C. Taxes
D. The customer✓
E. The design department
24. The survey 'How likely are you to recommend this company to a colleague or friend?' is used for:
A. Estimating competitor's retention
B. Estimating customer attraction✓
C. Estimating customer retention
D. Estimating customer satisfaction
E. Estimating competitors' attraction
25. What are the driving forces of a business with strong customer focus?
A. Packaging, pricing, and customer service
B. Customer experience and questions
C. Upper management
D. Customer leadership, attention to customer's voice, and customer satisfaction management✓
E. Customer span
26. Who sets the tone for a company's customer focus?
A. Competitors
B. Lower-level managers
C. Senior management leadership✓
D. Customers
E. Employees
27. What did Eugene W. Andrew say about customer experience?
A. Only 8% describe experience as above average, yet 70% of companies believe they provide at least average
B. Only 10% describe experience as inferior, yet 50% believe it's inferior
C. Only 8% describe experience as inferior, yet 10% believe it's inferior
D. 80% describe experience as superior, yet 8% believe it's superior
E. Only 8% describe experience as superior, yet 80% of companies believe they provide superior experience✓
28. What should be a company's top 2 priorities in managing customer satisfaction?
A. First, understand extremely/very satisfied customers and develop relationship. Second, manage dissatisfied customers✓
B. First, understand extremely/very dissatisfied customers. Second, manage satisfied customers
C. Put equal effort into satisfied and dissatisfied customers
D. First, see what competitors are doing. Second, apply to own strategy
E. First, create reward system. Second, apply monthly discounts
29. What guarantees the same companies will continue to dominate over the next decade?
A. Applying the best price policy
B. Knowing your environment
C. Nothing✓
D. Consistency
E. Pristine customer service
30. What is constant in the marketplace?
A. Competitors
B. Customers
C. Employees
D. Change✓
E. Environment