Management Information System (MIS) Practice Exam

Which is an advantage of using interactive communication via the Web?

1. Reduced transaction costs.

2. Increased customer loyalty.

3. Enhanced operational efficiency.

4. Reduced brand dilution.

The correct answer is: Increased customer loyalty.

Using interactive communication via the Web fosters increased customer loyalty because it allows businesses to engage directly with their customers in real time. This interactive approach can include live chat support, personalized content, social media interaction, and user-generated feedback. By responding to customer inquiries promptly and creating an ongoing dialogue, organizations can create a sense of connection and community, which is critical in building and maintaining customer loyalty. Customers who feel valued and heard are more likely to develop a favorable view of a brand, leading to repeated purchases and advocacy for the brand. Engaging with customers in a personalized manner makes them feel like their opinions matter, enhancing their emotional investment in the brand. This loyalty can translate into long-term relationships, which are often more profitable than one-time transactions. The other potential advantages highlight important aspects of business operations, but they might not directly correlate to the deeper emotional and relational connections achieved through interactive communication. For example, reduced transaction costs and enhanced operational efficiency focus on cost and productivity improvements but don't necessarily address customer engagement. Similarly, reduced brand dilution pertains to maintaining a strong brand identity in a competitive market, which, while important, is less about interactive communication and more about strategic branding efforts.