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| Chapter 1 Questions | Question #7 and Question #4 | | Marylou Lee | 3/9/2014 |

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7. What do we mean by an “engaged” customer, and how does this relate to customer loyalty?

The textbook states that “fully engaged customers are customers who are both satisfied and emotionally connected to a store.” (Timm, 2013) What this means is, you have to make a connection with your customers to make them want to come back to your business and product. Once you make a connection with your customers, you will create customer loyalty. The book describes customer loyalty as “a composite of three important characteristics: It reflects overall satisfaction, low or erratic levels of satisfaction disqualify a company from earning customer loyalty, and satisfaction is necessary but not sufficient for gaining loyalty. It involves a commitment on the part of the customer to make a sustained investment in an ongoing relationship with a company. It manifests in customer behaviors, including repeat buying (or the intention to do so as needed), willingness to recommend the company to others, and a commitment to the company demonstrated by a resistance to switch to a competitor.” (Timm, 2013) As a business owner, you may think that you have a loyal customer just because that customer comes in daily but in all honest, it could just be a convenience for them to shop at your business than it being loyalty to your company. The only true way that you have customer loyalty is by following the above characteristics and then that’s when you know you have achieved customer loyalty.

4. What major corporations that you’ve heard of seem to be doing the best job of building customer loyalty? In what specific ways do they attempt to build long-term relationships with customers?

I believe that Costco is doing the best job of building customer loyalty because of their prices and

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