Mkt 3340
Because customers are the primary source of profit for a company, customer lifetime
value (CLV) is a good proxy for company value: - Answers -true
JetBlue's Even More Space initiative allowed passengers to buy seats with more
legroom for a slightly higher price. The initiative increased JetBlue's profit martin. Which
costumer development strategy does this exemplify? - Answers -Redefining the
business
Amazon's recommendations for potential customers who are considering a purchase
includes related items using the phrase "customers who bought this item also bought..."
For example, Amazon would likely recommend a Kindle case when a customer was
looking at a Kindle. Which customer development strategy does this exemplify: -
Answers -cross-selling
Acquiring customers who do not appear attractive based on a customer lifetime value
(CLV) calculations should always be avoided: - Answers -false
Customer value has two sides: capturing value through customer ____ and delivering
value through customer___. - Answers -Profitability / experience
H.J Heinz Company has estimated the average CLV 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 bras such as Huts. From the perspective of
customer development, which of the following is an important piece of information
missing from the estimated of CLV: - Answers -Share of wallet
An independent marketing research firm sells syndicated marketing research services
to a variety of customers. An average corporate customer generates $6,000 in annual
profits per year. The firm is considering investing in additional services to improve
retention rates from 60% to 70%. Assuming a discount rate of 10%, the margin multiple
is 1.20 for a 60% retention rate and 1.75 for a 70% retention rate. If the retention rate
was improved from 60% to 70%, which of the following is the estimated difference in the
customer value (CLV) of an average corporate customer? - Answers -3300
Which of the following concepts refers to the total customer lifetime value (CLV) across
all existing and future customers and serves as a good proxy for the overall firm value?
- Answers -Customer equity
A whale curve is a graphical representation of company profits displayed by plotting
cumulative profits against the cumulative percentage of customer: - Answers -true
, Juan and Javier are two of the most effective salespeople at XYZ corp. In terms of
average revenue per customer. Juan tends to increase revenue per customer through
upselling, while Javier is more likely to increase revenue per customer through cross
selling. Although both approaches are effective with existing customer, cross selling is
more likely than upselling to: - Answers -Improve customer retention rate
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
The group of customers who receive high value from customer experience and who
provide high value to the company are referred to as: - Answers -Star Customers
Companies can employ various strategies to acquire customers. When Under Armour
Inc. introduce sportswear for women in the early 2000s, it acquired new customers who
did not buy its sports clothing designed for men. This is a successful attempt to acquire
customers by: - Answers -increasing market size
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. The example is BEST associated with which broad strategy
designed to acquire customers. - Answers -Offer discounts and incentives
Which of the following statements about CLV is True? - Answers -CLV must be
calculated for each customer individually
For noncontractual 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 the time period. - Answers -TRUE
A commercial cleaning company spends an average of $500 per year, per customer, in
supplies, wages, and account maintenance. An average customer generates $1,000 in
revenue per year. Assuming a discount rate of 12% and an annual retention rate of
80%, which of the following is the best estimate for the lifetime value of an average
customer using the simplified customer lifetime value (CLV) evaluation? - Answers -
$1,250
Assume that a company calculates customer lifetime value (CLV) using a margin
multiple. Assume the margin multiple is 2.5 and corresponds to an 80% retention rate
(r). Assume the estimate average monthly revenue of a customer is $125, and the
estimated average monthly cost of a customer is $40. What is the CLV of the estimated
average customer? - Answers -$2,550
Churn rates vary by company, industry, and country because culture and competitions
within an industry affects norms: - Answers -true
Because customers are the primary source of profit for a company, customer lifetime
value (CLV) is a good proxy for company value: - Answers -true
JetBlue's Even More Space initiative allowed passengers to buy seats with more
legroom for a slightly higher price. The initiative increased JetBlue's profit martin. Which
costumer development strategy does this exemplify? - Answers -Redefining the
business
Amazon's recommendations for potential customers who are considering a purchase
includes related items using the phrase "customers who bought this item also bought..."
For example, Amazon would likely recommend a Kindle case when a customer was
looking at a Kindle. Which customer development strategy does this exemplify: -
Answers -cross-selling
Acquiring customers who do not appear attractive based on a customer lifetime value
(CLV) calculations should always be avoided: - Answers -false
Customer value has two sides: capturing value through customer ____ and delivering
value through customer___. - Answers -Profitability / experience
H.J Heinz Company has estimated the average CLV 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 bras such as Huts. From the perspective of
customer development, which of the following is an important piece of information
missing from the estimated of CLV: - Answers -Share of wallet
An independent marketing research firm sells syndicated marketing research services
to a variety of customers. An average corporate customer generates $6,000 in annual
profits per year. The firm is considering investing in additional services to improve
retention rates from 60% to 70%. Assuming a discount rate of 10%, the margin multiple
is 1.20 for a 60% retention rate and 1.75 for a 70% retention rate. If the retention rate
was improved from 60% to 70%, which of the following is the estimated difference in the
customer value (CLV) of an average corporate customer? - Answers -3300
Which of the following concepts refers to the total customer lifetime value (CLV) across
all existing and future customers and serves as a good proxy for the overall firm value?
- Answers -Customer equity
A whale curve is a graphical representation of company profits displayed by plotting
cumulative profits against the cumulative percentage of customer: - Answers -true
, Juan and Javier are two of the most effective salespeople at XYZ corp. In terms of
average revenue per customer. Juan tends to increase revenue per customer through
upselling, while Javier is more likely to increase revenue per customer through cross
selling. Although both approaches are effective with existing customer, cross selling is
more likely than upselling to: - Answers -Improve customer retention rate
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
The group of customers who receive high value from customer experience and who
provide high value to the company are referred to as: - Answers -Star Customers
Companies can employ various strategies to acquire customers. When Under Armour
Inc. introduce sportswear for women in the early 2000s, it acquired new customers who
did not buy its sports clothing designed for men. This is a successful attempt to acquire
customers by: - Answers -increasing market size
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. The example is BEST associated with which broad strategy
designed to acquire customers. - Answers -Offer discounts and incentives
Which of the following statements about CLV is True? - Answers -CLV must be
calculated for each customer individually
For noncontractual 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 the time period. - Answers -TRUE
A commercial cleaning company spends an average of $500 per year, per customer, in
supplies, wages, and account maintenance. An average customer generates $1,000 in
revenue per year. Assuming a discount rate of 12% and an annual retention rate of
80%, which of the following is the best estimate for the lifetime value of an average
customer using the simplified customer lifetime value (CLV) evaluation? - Answers -
$1,250
Assume that a company calculates customer lifetime value (CLV) using a margin
multiple. Assume the margin multiple is 2.5 and corresponds to an 80% retention rate
(r). Assume the estimate average monthly revenue of a customer is $125, and the
estimated average monthly cost of a customer is $40. What is the CLV of the estimated
average customer? - Answers -$2,550
Churn rates vary by company, industry, and country because culture and competitions
within an industry affects norms: - Answers -true
