Chapter 5 CRM

1. What is the primary focus of traditional marketing metrics?

• Customer loyalty and retention

• Measuring market position and revenue growth

• Understanding customer lifetime value

• Assessing customer acquisition costs

Which of the following is NOT a customer acquisition metric?

• Acquisition Rate

• Acquisition Cost

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  Sales Growth

• Market Share

What does the retention rate measure?

• The percentage of customers who remain loyal over time

• The number of new customers acquired

• The cost of acquiring a new customer

• The probability of a customer making a repeat purchase

How is the lifetime duration of a customer typically calculated?

• By analyzing the number of purchases made per year

• By estimating how long a customer remains active before churning

• By calculating the total revenue generated by a customer

• By dividing acquisition cost by customer value

In the context of customer activity metrics, what does P(Active) represent?

• The probability of a customer purchasing a high-value product

• The likelihood of a customer being active at a specific time

• The probability of acquiring a new customer

• The percentage of customers switching brands

What does the ‘Size of Wallet’ metric measure?

• The total budget a company has for marketing campaigns

• The total spending of a customer in a given category

• The percentage of revenue generated from repeat customers

• The number of products a customer buys from a single firm

How is the Share of Category Requirement (SCR) typically calculated?

• ) By dividing a firm’s sales to a customer by the customer’s total spending in the category

• By summing up the total purchases made by all customers

• By multiplying the customer acquisition rate by retention rate

• By analyzing historical trends in customer behavior

By analyzing historical trends in customer behavior

• Size of Wallet considers only new customers, while Share of Wallet includes all customers

• Share of Wallet focuses on customer loyalty, while Size of Wallet measures marketing efficiency

• Share of Wallet measures a firm’s share of a customer’s spending, while Size of Wallet measures total spending in the category

• They are the same metric with different names

What does the transition matrix help companies analyze?

• Customer movement between different firms over time

• The profitability of various customer segments

• The impact of promotions on sales

• The average spending of customers

Which metric would be most useful for predicting long-term customer loyalty?

• Sales Growth

• Market Share

• Acquisition Cost

• Retention Rate