ACCA Performance Management (F5) Certification Practice Exam

What strategy might help in retaining existing customers according to CRM objectives?

1. Expanding product lines

2. Implementing promotional campaigns

3. Providing exceptional after-sales service

4. Increasing market penetration

The correct answer is: Providing exceptional after-sales service

Providing exceptional after-sales service is a key strategy for retaining existing customers because it enhances customer satisfaction and loyalty. When customers feel valued and receive support after their purchase, they are more likely to remain loyal to the brand. Exceptional after-sales service can include timely responses to inquiries, addressing concerns or issues promptly, and ensuring that customers are happy with their purchases. This level of care contributes to a positive overall experience, making customers less likely to switch to competitors. In the context of Customer Relationship Management (CRM), the goal is to deepen relations with existing customers, and offering outstanding after-sales service creates a sense of trust and confidence. Satisfied customers are also more inclined to make repeat purchases and may even recommend the business to others, further enhancing retention and potentially leading to new customer acquisition through positive word-of-mouth. Other strategies, such as expanding product lines or implementing promotional campaigns, may also draw in new customers or enhance offerings but do not specifically target the retention of existing ones in the same effective manner as strong after-sales support. Increasing market penetration generally focuses on acquiring new customers in existing markets rather than nurturing relationships with those already engaged with the business.