Question 1

Customer relationship management programs are built on two primary metrics: lifetime value of customers and data mining.

Accepted Answer

Customer relationship management (CRM) programs are built on understanding customer needs, preferences, and behaviors, not just on the lifetime value of customers and data mining. While these two metrics can be important components of CRM, they do not encompass the entirety of what CRM programs are built on. CRM involves a wide range of activities including communication, sales, marketing, and customer service, aimed at managing and analyzing customer interactions and data throughout the customer lifecycle.

Question 2

A key principle in developing a loyalty or frequency program is to design the program to enhance the value of what the product offers to customers.

Accepted Answer

The key principle in developing a loyalty or frequency program is to design the program in such a way that it enhances the value of what the product offers to customers, which in turn can help to improve customer retention, increase customer loyalty and encourage repeat purchases. This is why it is so important to consider what your customers want and need from your products or services. By focusing on these key factors, you can create a loyalty or frequency program that truly enhances the value of what you offer to your customers, and helps to build a strong and loyal customer base.

Question 3

According to the Direct Marketing Association,about 60 percent of a typical direct marketing budget targets:
A)former customers who have not purchased recently.
B)prospecting for new customers.
C)retaining current customers.
D)individuals from an internal customer list.

Accepted Answer

According to the Direct Marketing Association, about 60% of a typical direct marketing budget targets prospecting for new customers. This means that the majority of the budget is focused on acquiring new customers rather than retaining current ones or targeting former customers who have not made a recent purchase. While internal customer lists may be used for prospecting, the primary focus is on finding new customers.

Question 4

A program designed to build long-term loyalty and bonds with customers through the use of a personal touch facilitated by technology is a customer relationship management program.

Accepted Answer

A customer relationship management program is designed to build and maintain strong relationships with customers through technology-enabled personalization and communication. This helps to increase customer loyalty, satisfaction, and retention over the long term.

Question 5

When customers in a permission marketing program receive rewards during the program in addition to at the beginning,it creates a feeling of empowerment.

Accepted Answer

The answer of When customers in a permission marketing program...

Question 6

The value of the reward in a frequency program has no relationship on the effort individuals will expend to obtain the reward.

Accepted Answer

The value of the reward can actually impact the effort individuals will expend to obtain it. A higher value reward may motivate individuals to work harder to achieve it, while a low value reward may not be as motivating. However, other factors such as the difficulty of the task and the individual's personal motivation also play a role in their level of effort.

Question 7

Describe a customer relationship management (CRM)program.

Accepted Answer

The answer of Describe a customer relationship management (CRM)program....

Question 8

In general,customer relationship management programs should be designed to enhance customer loyalty.

Accepted Answer

Customer relationship management programs are designed to improve the overall customer experience, which can lead to increased satisfaction and loyalty.

Question 9

The lifetime value of a customer is based on the idea that the amount of money customers spend with a firm increases over time.

Accepted Answer

The answer of The lifetime value of a customer is...

Question 10

When providing rewards for a frequency program,a variable ratio reward schedule is superior to regularly scheduled rewards.

Accepted Answer

A variable ratio reward schedule is based on rewarding the desired behavior after an unpredictable number of instances, which can create a sense of excitement and anticipation in the individual, and result in increased motivation and engagement compared to a regular, predictable reward schedule.

Question 11

Describe a permission marketing program.

Accepted Answer

The answer of Describe a permission marketing program....

Question 12

Companies develop frequency programs to encourage customer loyalty and to generate sales.

Accepted Answer

The answer of Companies develop frequency programs to encourage customer...

Question 13

Describe a frequency program.

Accepted Answer

The answer of Describe a frequency program....

Question 14

The basic idea behind customer relationship management is that companies can use databases to customize products and communications to customers that would result in higher sales and profits.

Accepted Answer

This is the basic concept behind customer relationship management, where companies use customer data to personalize their marketing efforts and improve customer satisfaction, ultimately leading to higher sales and profits.

Question 15

In purchasing a direct mailing list,a response list consists of individuals who have:
A)met a specific demographic profile.
B)responded to previous direct mail offers made by the company purchasing the list.
C)made purchases or responded to direct mail offers in the past.
D)responded to a direct mail offer within the last 30 days.

Accepted Answer

A response list is specifically compiled from individuals who have previously made purchases or responded to direct mail offers, indicating a higher likelihood of future engagement.

Question 16

Heavy users of a good or service are the best segment to target with a frequency program.

Accepted Answer

The answer of Heavy users of a good or service...

Question 17

With a frequency program,consumers are more likely to put forth greater effort to obtain luxury goods as opposed to necessity items.

Accepted Answer

This statement is true. With a frequency program, consumers are incentivized to continue making purchases in order to earn rewards or perks. This can lead consumers to be more willing to splurge on luxury goods in order to accrue more points or rewards. On the other hand, consumers may be less likely to expend the same effort for necessity items that they would already be buying regardless of the rewards program.

Question 18

In a customer relationship management (CRM)program,the share of a customer refers to a customer's potential value.

Accepted Answer

The share of a customer in a CRM program refers to the customer's potential value in terms of their spending patterns and potential for future purchases.

Question 19

Selling products to customers without the use of other channel members is:
A)database marketing.
B)direct marketing or direct-response marketing.
C)indirect marketing.
D)by-pass marketing.

Accepted Answer

Direct marketing or direct-response marketing is the practice of selling products directly to the customers without the involvement of intermediaries or other channel members such as wholesalers or retailers. This can be done through various methods such as email marketing, telemarketing, or online sales.

Question 20

A frequency program provides incentives that are designed to encourage customers to make repeat purchases.

Accepted Answer

A frequency program rewards customers for making repeat purchases, which increases their loyalty to the brand or business. This can be achieved through various incentives, such as discounts or exclusive offers for frequent shoppers.

Quiz 11: Database and Direct Response Marketing and Personal Selling