Final answer:
Maintaining high standards of customer satisfaction is key for firms to gain repeat customers and recommendations, which are vital for a good reputation and can command higher prices. Such standards should be applied consistently and be based on scientific evidence.
Step-by-step explanation:
The rationale for firms to maintain high standards of customer satisfaction for both internal and external customers lies in the desire for repeat customers and the power of recommendations, which are crucial for establishing and maintaining a good reputation. A firm that is recognized for caring about its reputation is able to alleviate concerns about product quality among consumers.
For example, a well-established grocery store known for its reputation has the leverage to charge more than a temporary stand because customers trust in the quality and expect continued interactions in the future. Furthermore, viewing a manager as an important internal customer and providing exceptional service can lead to positive feedback, increased job opportunities, and higher job satisfaction. It is important for decisions made by firms regarding customer satisfaction to be non-arbitrary and non-discriminatory; they must be consistent for both foreign and domestic companies and be rooted in scientific evidence.