Measuring Service Quality Flashcards

What is 'customer lifetime value' (CLV) and why is it relevant to service quality measurement?

Answer: The projected net revenue from a customer over the entire relationship; high CLV customers justify higher service investment

CLV estimates total future revenue from a customer, helping prioritize service investment since retaining high-CLV customers through quality service drives profitability.

Which approach to quality improvement focuses on reducing defects to 3.4 per million opportunities?

Answer: Six Sigma

Six Sigma targets 3.4 defects per million opportunities (DPMO), representing near-perfect quality through data-driven process improvement.

A service organization surveys customers 6 months after purchase to measure long-term loyalty. This type of survey is best described as a:

Answer: Relationship survey

Relationship surveys measure overall satisfaction and loyalty at regular intervals, capturing the cumulative customer experience rather than a single event.

What is the purpose of 'gap analysis' in the context of service quality?

Answer: To compare current performance levels against desired standards or customer expectations

Gap analysis identifies the distance between current service quality and target performance or customer expectations, guiding improvement priorities.

Which of the following best describes 'closed-loop feedback' in a customer service quality program?

Answer: A process where customer feedback triggers follow-up action and the customer is notified of the resolution

Closed-loop feedback means acting on customer feedback and then communicating back to the customer what was done, closing the loop and demonstrating responsiveness.

When presenting service quality metrics to leadership, which practice best ensures data credibility?

Answer: Disclosing methodology, sample sizes, and confidence intervals alongside the results

Credible data reporting includes methodology transparency, sample size disclosure, and confidence intervals so leadership can properly assess reliability.

An organization uses a 'balanced scorecard' approach to service quality. What is the key advantage of this method?

Answer: It provides a multi-dimensional view combining financial, customer, process, and learning metrics

The balanced scorecard integrates multiple perspectives — financial results, customer outcomes, internal processes, and learning/growth — giving a holistic view of organizational performance.