Question 1

Empowerment in a CRM environment is normally a process of collecting customer information through customers' feedback on products.

Accepted Answer

This is learning.Empowerment is the delegation of authority to solve customers' problems quickly.

Question 2

The interaction between a customer and the organization is the foundation on which a CRM system is built.

Accepted Answer

The interaction between a customer and the organization is the starting point for gathering customer data and building a relationship, which is the foundation of a CRM system.

Question 3

Privacy issues are the primary reason for centralizing data in a CRM.

Accepted Answer

Customer data is centralized in a CRM system not for privacy reasons,but to actually to make it available throughout the organization.

Question 4

RFM analysis is used to delete unnecessary or duplicated data.

Accepted Answer

RFM analysis identifies customers most likely to purchase again.

Question 5

Customer relationship management (CRM)requires that organizations be organized around customer segments.

Accepted Answer

CRM focuses on building and maintaining relationships with customers, which requires a customer-centric approach. This involves organizing and tailoring strategies, communication, and resources around different customer segments based on their unique characteristics and needs.

Question 6

Data consolidation is an analytical process that compiles actionable data about the purchase habits of a firm's current and potential customers.

Accepted Answer

This is data mining.

Question 7

For a CRM system to be effective,customer information must be stored in a data matrix.

Accepted Answer

The information must be stored in a data warehouse,a central repository for data from various functional areas of the organization.

Question 8

Volvo has a Web site that caters to car enthusiasts who might want to see concept cars evolve into real-life products.Volvo would likely have used data mining to locate people who were car enthusiasts and innovators.

Accepted Answer

Volvo could have used data mining techniques to analyze online behavior or social media activity of individuals and identify those who are interested in cars and innovation. This would allow them to target their marketing efforts towards a more specific audience and provide them with relevant information on their website.

Question 9

Channel interactions are the relationships a manufacturer has with its distributors.

Accepted Answer

Channel interactions are between customers and marketers and include store visits,conversations with salespeople,and wireless communication.

Question 10

Customer-centric is an internal management philosophy similar to the marketing concept.

Accepted Answer

Customer-centricity is a management philosophy that prioritizes the needs and preferences of customers in all aspects of the business, much like the marketing concept which also emphasizes on putting the customer first.

Question 11

Multinational companies often face difficult problems when pulling together internal data about their customers.

Accepted Answer

Multinational companies with diverse operations in different countries can find it challenging to collate and integrate customer data from various sources and systems, leading to difficulties in gaining a comprehensive understanding of their customers' behaviors and preferences.

Question 12

Janie contacts calls Lands' End to ask if the company sells pajamas for teenage girls.The customer service representative who speaks with Janie advises her of the various options.This is an example of knowledge management.

Accepted Answer

It is an example of an interaction-a touch point at which a customer and company representative exchange information and develop learning relationships.

Question 13

When Amazon.com asks visitors to its Internet site to create wish lists and then invites them to send the lists to people who may be planning on buying them a present soon,it is relying on Web-based interactions to help it learn about its customers.

Accepted Answer

Amazon is indeed utilizing web-based interactions (creating wish lists and sharing with others) to gather information about its customers and their preferences.

Question 14

Web-based interactions are an increasingly popular touch point for customers to communicate with companies on their own terms.

Accepted Answer

This statement is true. As technology continues to advance, more customers are turning to web-based interactions such as live chat, social media, and email to communicate with companies. This allows customers to have a more convenient and comfortable experience, while also giving companies the opportunity to provide quicker and more efficient customer service.

Question 15

Consumers are reluctant to enter information through point-of-sale interactions because of privacy violation fears.

Accepted Answer

Many point-of-sale software programs enable customers to easily provide information about themselves without feeling their privacy has been violated.

Question 16

Database elaboration is the addition of information to customer or prospect records for the purpose of better describing or better determining the responsiveness of those customers or prospects.

Accepted Answer

This is referred to as database enhancement and involves purchasing information on customers or prospects to better describe their needs or determine how responsive they might be to marketing programs.

Question 17

To initiate the CRM cycle,a company must first identify customer relationships within the organization.

Accepted Answer

This statement is true. Before a company can implement a CRM strategy, it must first identify its customer relationships in order to effectively manage and prioritize them.

Question 18

Response lists are especially important in database creation because past behavior is a strong predictor of future behavior.

Accepted Answer

Response lists are used to collect data on past behavior, which can help predict or analyze future behavior. This makes them valuable in database creation for purposes such as marketing, customer behavior analysis, and risk assessment.

Question 19

The process of centralizing data in a CRM system is sometimes referred to as the interpolation of external and internal touch points.

Accepted Answer

The process of centralizing data in a CRM system is called data warehousing.

Question 20

Data mining is used to find hidden patterns and relationships in the customer data stored in the data warehouse.

Accepted Answer

Data mining utilizes various algorithms and techniques to extract useful insights and patterns from a large dataset. Customer data stored in a data warehouse can be utilized to gain insights into customer behavior, preferences, and trends, and to identify patterns and relationships that can inform marketing, sales, and other business strategies.

Quiz 21: Customer Relationship Management (CRM)