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I consulted the collocation dictionary and found the verbs "raise" and "improve" are commonly used with "standards." But I'm wondering if I can use the words "enhancing" or "increasing" in the following passage. Thanks for help.

As our survey shows, consumer power has great implications for companies, because it is changing the way people stop. Many firms already claim to be "customer-driven" or "customer-centered." Now their claims will be tested as never before. Taking advantage of shopper's ignorance will no longer be possible: people will know--and soon tell others, even those without the Internet--that prices in the next town are lower or that certain goods are inferior. The Internet is working wonders in ________ standards. Good and honest firms should benefit most.

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The word you are looking for is improving.

Increase means "to grow larger". If you used to have four dollars and now you have five dollars, your savings has increased. A "standard" does not have a size.

Enhance means improve by addition. Having five dollars instead of four might enhance your buying power, but going to a cheaper store does not: your buying power is increased, but technically not enhanced.

It's a subtle distinction, and not one worth learning, since enhance has been destroyed as a meaningful word through overuse by bureaucrats and marketing types. Just avoid it altogether and say "improve".

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I think your choice of words is somewhat limited by the use of "standards". That word has at least two relevant meanings:

(1) a set of rules to which organisations are expected to adhere,
(2) a level of service which organisations actually provide.

You are using the word "standards" in the second sense, but if you choose less idiomatic phrases could easily be interpreted in the first. For that reason, I'd stick with raise standards.

You could instead opt to use a different word/phrase instead of "standards". One natural alternative might be "the customer experience".

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