financial and economic impact of services

Question 1

Return on service quality (ROSQ)

Answer 1

the analytical approach to determining the financial and economic impact of service iniatives and improvements

Question 2

assumptions under ROSQ

Answer 2

1. service quality is an investment
2. service quality efforts must be financially
   accountable
3. its possible to spend to much on service
   quality
4. not all service quality expectations are
   equally valid

Question 3

invest to retain customers

Answer 3

1. lower costs
2. volume of purchases
3. price premium
4. word of mouth

Question 4

invest to acquire customers

Answer 4

1. market share
2. reputation/positive brand equity
3. price premium

Question 5

Net Promotor Score (NPS)

Answer 5

-is based on the idea that word of mouth communication, rather than any other customer metric, is the best predictor of growth and therefor financial performance

Question 6

customer equity

Answer 6

-the total of the discounted lifetime values
summed over all of the firms customers

Question 7

key drivers of service quality, customer retention, and profits

Answer 7

1. service attributes
2. services encounters
3. service quality
4. behavioral intentions
5. customer retention
6. profits

Question 8

effective nonfinancial measures - 4 mistakes

Answer 8

1. not linking measures to strategy
2. not validating the links between nonfinancial measures and strategy
3. not setting the right performance targets \
4. measuring incorrectly

Question 9

measures that matter most

Answer 9

1. selection and staffing
2. employee satisfaction
3. employee added value
4. customer satisfaction
5. customer buying behavior
6. sustained profitability
7. shareholder value