Small reductions in customer defections produce significant increases in profits for all of the following reasons EXCEPT ________.
A) loyal customers buy more products
B) loyal customers pay less attention to competitors' advertising
C) loyal customers are more price sensitive
D) loyal customers spread positive word-of-mouth and refer other customers
E) it is more expensive to secure new customers than to keep existing ones

Question

Quizplus · Accepted Answer

Loyal customers are less price sensitive, not more. This is because they see value in the relationship they have with the company and are willing to pay more for the consistent quality and service they receive.

Small Reductions in Customer Defections Produce Significant Increases in Profits