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Discussion

Customer retention, repeat business and customer referrals are alternate measures of :

  • A.Internal service quality
  • B.External service quality
  • C.Employee satisfaction
  • D.Customer loyalty

Answer: D

They are measures of customer loyalty.

In the service-profit chain of Heskett and colleagues, internal service quality leads to employee satisfaction, which leads to employee loyalty and productivity, then to external service value, customer satisfaction and customer loyalty, and finally to profit and growth. Customer loyalty is measured by retention, repeat business and referrals.

Internal service quality concerns the workplace and support employees receive, employee satisfaction concerns staff attitudes, and external service quality is what customers receive. None is measured by repeat purchases and referrals.

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