Question 1

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

Accepted Answer

To start the CRM cycle, a company must first identify all of its customer relationships, which include past, current, and potential customers.

Question 2

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

Accepted Answer

Data mining is a process of analyzing large datasets to find patterns, correlations, and relationships between variables. These patterns can be used to discover insights and make data-driven decisions in various industries, including marketing, finance, and healthcare. In the context of customer data, data mining can help businesses identify customer behavior, preferences, and purchase patterns, which can be used to improve marketing strategies, product development, and customer retention.

Question 3

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.com is using web-based interactions, specifically wish lists and the option to send them to others, to gather information about their customers' preferences and potential gift recipients.

Question 4

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

Accepted Answer

Multinational companies operate in various countries and regions, which can result in fragmented data sources and inconsistencies in data collection methods. Additionally, cultural differences and privacy laws can also pose challenges in gathering accurate and reliable customer data.

Question 5

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 6

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

Accepted Answer

Customer relationship management focuses on understanding and catering to the needs of specific customer segments, which requires an organization to be organized around those segments.

Question 7

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 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

Data mining is a technique used to discover patterns and relationships in data. In this scenario, Volvo would have used data mining to search through large amounts of data (such as social media activity, online forums, and previous interactions with Volvo's website) to identify individuals who might be interested in concept cars and automotive innovation. This would allow Volvo to tailor its marketing efforts and product development strategies to better meet the needs and desires of its target audience.

Question 9

RFM analysis is used to delete unnecessary or duplicated data.

Accepted Answer

RFM analysis identifies those customers most likely to purchase again.

Question 10

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

Accepted Answer

Customer-centric philosophy focuses on putting the customer at the center of all business decisions and actions, similar to the marketing concept, which also revolves around creating customer value and satisfaction.

Question 11

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 12

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 13

Janie contacts 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 14

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 15

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 collecting customer data and building customer relationships in a CRM system.

Question 16

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 make it available throughout the organization.

Question 17

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

Accepted Answer

Response lists contain data on past behavior and preferences, which can help predict future behavior and guide database creation. Therefore, they are an important tool for creating effective databases.

Question 18

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,interactions via the Web,and wireless communications.

Question 19

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

Accepted Answer

Web-based interactions, such as email, web chat, and social media messaging, have become a preferred method for customers to interact with companies as they offer convenience and flexibility.

Question 20

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.

Quiz 21: Customer Relationship Management Crm