Midterm MKT 3340
Which of the following statements about customer lifetime value (CLV) is true? -
Answers -CLV must be calculated for each customer individually
Subscription-based services such as Netflix offer free, limited-time trials to new
customers. Some services may extend the free trial period to customers who opt to
unsubscribe to the service. This example is BEST associated with which broad strategy
designed to acquire customers? - Answers -offer discounts and incentives
Customer______ is the percentage of customers who stay with a company in a given
period, while customer ____ is the percentage of customers who leave a company
within a given period of time. - Answers -Retention rate; churn rate
Assume that Kroger is attempting to increase its average retention rate from 75% to
80% By how many months would this increase the expected customer lifetime? -
Answers -12 months
As part of a strategy to improve customer satisfaction and loyalty, a sales manager has
asked key account sales people to decrease the annual customer churn rate from 50%
to 40% during the next fiscal year. Decreasing the customer churn rate to 40% will
increase the average expected customer lifetime by - Answers -6 months
Which of the following is not a key action that can help organizations retain customer? -
Answers -Increase the customer churn rate
H.J. Heinz company has estimated that average customer lifetime values are equally
attractive for customers in two of its broad business-to business segments: restaurants
and hospitals. Heinz believes that its restaurant customers are generally loyal to Heinz
brands, while hospitals often purchase competing brands such as Hunts. From the
perspective of customer development, which of the following is an important piece of
information missing from the estimates of customer lifetime value? - Answers -Share of
wallet
Juan and Javier are two of the most effective salespeople at XYZ corporation in term of
average revenue per customer. Juan tends to increase revenue per customer
throughout upwelling, while Javier is more likely to increase revenue per customer
throughout cross selling. Although both approaches are effective with existing
customers, cross selling is more likely than upselling to: - Answers -Improve customer
retention rate
Which of the following concepts refers to the total customer lifetime value across all
existing and future customers and serves as a good proxy for the overall firm value? -
Answers -Customer equity
, Assume that a company has segmented its customers based on customer lifetime value
and customer referral value. From a strategic perspective, a customer with a high CRV
but a low CLV should be - Answers -Targeted for customer development strategies to
increase wallet share.
Customer value has two sides: capturing value through customer ____ and delivering
value through customer _____. - Answers -profitability; experience
TRUE OR FALSE: The goal of customer management is to grow the business
profitability by acquiring, retaining, and developing the right customers. - Answers -
TRUE
TRUE OR FALSE: Customer lifetime value is the present value of all future streams of
revenue that an individual customer generates over the life of his or her business with
the firm. - Answers -FALSE
TRUE OR FALSE: Acquiring customers who do not appear attractive based on
customer lifetime value calculations should always be avoided. - Answers -FALSE
TRUE OR FALSE: A whale curve i a graphical representation of company profits
displayed by plotting cumulative profits against the cumulative percentage of customers.
- Answers -TRUE
TRUE OR FALSE: Churn rates vary by company, industry, and country because culture
and competition within an industry affect norms. - Answers -TRUE
TRUE OR FALSE: For no contractual buying situations, it is difficult for companies to
determine retention rates because they may not know if the customer has defected or if
the customer has simply not made a purchase during their time period. - Answers -
TRUE
TRUE OR FALSE: Because customers are the primary source of profit for a company,
customer lifetime value is a good proxy for company value. - Answers -TRUE
According to the customer profitability/ customer experience matrix, free riders have
high customer experience yet low profitability. Which of the following is a tactic that is
not likely to increase the profitability of free riders? - Answers -Increase customer
delight
When determining the customer lifetime value for targeted group of customers, the most
important factor that the management of a company to consider is which? - Answers -
The contribution margin of this particular customer group.
Companies can employ various strategies to acquire customers. When under armor,
INC. introduced sportswear for women in the early 2000s, acquired new customers who
Which of the following statements about customer lifetime value (CLV) is true? -
Answers -CLV must be calculated for each customer individually
Subscription-based services such as Netflix offer free, limited-time trials to new
customers. Some services may extend the free trial period to customers who opt to
unsubscribe to the service. This example is BEST associated with which broad strategy
designed to acquire customers? - Answers -offer discounts and incentives
Customer______ is the percentage of customers who stay with a company in a given
period, while customer ____ is the percentage of customers who leave a company
within a given period of time. - Answers -Retention rate; churn rate
Assume that Kroger is attempting to increase its average retention rate from 75% to
80% By how many months would this increase the expected customer lifetime? -
Answers -12 months
As part of a strategy to improve customer satisfaction and loyalty, a sales manager has
asked key account sales people to decrease the annual customer churn rate from 50%
to 40% during the next fiscal year. Decreasing the customer churn rate to 40% will
increase the average expected customer lifetime by - Answers -6 months
Which of the following is not a key action that can help organizations retain customer? -
Answers -Increase the customer churn rate
H.J. Heinz company has estimated that average customer lifetime values are equally
attractive for customers in two of its broad business-to business segments: restaurants
and hospitals. Heinz believes that its restaurant customers are generally loyal to Heinz
brands, while hospitals often purchase competing brands such as Hunts. From the
perspective of customer development, which of the following is an important piece of
information missing from the estimates of customer lifetime value? - Answers -Share of
wallet
Juan and Javier are two of the most effective salespeople at XYZ corporation in term of
average revenue per customer. Juan tends to increase revenue per customer
throughout upwelling, while Javier is more likely to increase revenue per customer
throughout cross selling. Although both approaches are effective with existing
customers, cross selling is more likely than upselling to: - Answers -Improve customer
retention rate
Which of the following concepts refers to the total customer lifetime value across all
existing and future customers and serves as a good proxy for the overall firm value? -
Answers -Customer equity
, Assume that a company has segmented its customers based on customer lifetime value
and customer referral value. From a strategic perspective, a customer with a high CRV
but a low CLV should be - Answers -Targeted for customer development strategies to
increase wallet share.
Customer value has two sides: capturing value through customer ____ and delivering
value through customer _____. - Answers -profitability; experience
TRUE OR FALSE: The goal of customer management is to grow the business
profitability by acquiring, retaining, and developing the right customers. - Answers -
TRUE
TRUE OR FALSE: Customer lifetime value is the present value of all future streams of
revenue that an individual customer generates over the life of his or her business with
the firm. - Answers -FALSE
TRUE OR FALSE: Acquiring customers who do not appear attractive based on
customer lifetime value calculations should always be avoided. - Answers -FALSE
TRUE OR FALSE: A whale curve i a graphical representation of company profits
displayed by plotting cumulative profits against the cumulative percentage of customers.
- Answers -TRUE
TRUE OR FALSE: Churn rates vary by company, industry, and country because culture
and competition within an industry affect norms. - Answers -TRUE
TRUE OR FALSE: For no contractual buying situations, it is difficult for companies to
determine retention rates because they may not know if the customer has defected or if
the customer has simply not made a purchase during their time period. - Answers -
TRUE
TRUE OR FALSE: Because customers are the primary source of profit for a company,
customer lifetime value is a good proxy for company value. - Answers -TRUE
According to the customer profitability/ customer experience matrix, free riders have
high customer experience yet low profitability. Which of the following is a tactic that is
not likely to increase the profitability of free riders? - Answers -Increase customer
delight
When determining the customer lifetime value for targeted group of customers, the most
important factor that the management of a company to consider is which? - Answers -
The contribution margin of this particular customer group.
Companies can employ various strategies to acquire customers. When under armor,
INC. introduced sportswear for women in the early 2000s, acquired new customers who
