CH 3
Q: What is customer engagement?
A: A customer’s commitment to a brand and its products.
Q: What are the benefits of high customer engagement?
A: - Higher retention & loyalty
More effort to do business with the company
Increased advocacy & recommendations
Q: How can businesses build customer engagement?
A: - Honest communication
Customer involvement (e.g., social media, surveys)
Sharing company stories to create emotional connections
Q: What are examples of technology-driven customer engagement?
A: - Audi’s virtual reality car demos
AI-powered chatbots in banking & healthcare
Q: How does dissatisfaction impact a business?
A: Dissatisfied customers tell twice as many people about bad experiences.
Q: What is the key difference between satisfaction and loyalty?
A: - Satisfaction = attitude
Loyalty = behavior (repeat business & referrals)
Q: Why are loyal customers valuable?
A: They spend more, pay higher prices, refer others, and cost less to retain.
Q: What did Carl Sewell discover about customer lifetime value?
A: A loyal Cadillac customer was worth over $300,000.
Q: How does Avis prioritize customer satisfaction?
A: By improving satisfaction rather than lowering rates to gain market share.
Q: Why is customer satisfaction critical to profitability?
A: 65% of business comes from existing customers, and acquiring new customers costs 5x more.
Q: How does market share growth relate to customer satisfaction?
A: Higher satisfaction = higher retention & financial success.
Q: How did customer satisfaction impact Johnson Controls Inc. (JCI)?
A: A 1% increase in satisfaction = $13 million in service contract renewals.
Q: How does ISO 9000 emphasize customer focus?
A: Top management must ensure customer needs are met to enhance satisfaction.
Q: What does ISO 9000 require organizations to do regarding customers?
A: - Determine and meet customer requirements
Establish communication procedures`
Monitor customer satisfaction
Q: What influences customer perceptions of value and satisfaction?
A: The entire experience—purchase, ownership, and service.
Q: How does General Motors define a quality product?
A: A product that provides a satisfying overall experience.
Q: What must companies do beyond reducing defects and resolving complaints?
A: Design products that delight customers and anticipate their needs.
Q: What is the most important principle of quality management?
A: Customer focus—customers determine business success.
Q: What is a key cultural belief at General Electric regarding customers?
A: “Customers determine our success.”
Q: What does the Japanese word "okyakusama" mean?
A: Both "customer" and "honorable guest."
Q: What organizations are known for being customer-obsessed?
A: Ritz-Carlton, Disney, Toyota's Lexus division.