Question 1

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 2

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, also referred to as direct-response marketing, involves selling products directly to customers without the use of intermediaries or other channel members. This can be done through various methods such as mail or email marketing, telemarketing, or online advertising.

Question 3

In purchasing a direct mailing list, a compiled 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 compiled list is created by gathering data from various sources to meet specific demographic criteria, rather than based on responses to previous offers or recent activity.

Question 4

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

Accepted Answer

Customer relationship management programs are implemented to build stronger relationships with customers, provide personalized experiences, and ultimately increase customer loyalty.

Question 5

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

Customer relationship management programs are designed to build and maintain strong relationships with customers through personalized interactions, often facilitated by technology such as customer data management systems, email marketing, and social media engagement. The goal is to create long-term loyalty and increase customer satisfaction by providing a personalized experience and addressing individual needs and preferences.

Question 6

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

The Direct Marketing Association states that around 60 percent of a typical direct marketing budget is allocated towards prospecting for new customers. This involves identifying and reaching out to potential customers who have not yet made a purchase from the company. This is an important part of direct marketing as it helps companies expand their customer base and reach new markets.

Question 7

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 8

In CRM the share of a customer refers to a customer's potential value.

Accepted Answer

The share of a customer in CRM refers to the potential value that a customer can bring to a business over a period of time. This is determined based on factors such as their past purchase behavior, their likelihood to make future purchases, and the value of those purchases. This information is used by businesses to understand which customers are most valuable and to target their marketing and sales efforts accordingly.

Question 9

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 10

The most common method of direct marketing is:
A) direct mail.
B) telemarketing.
C) direct response mass media.
D) emails.

Accepted Answer

Direct mail is the most widely used method of direct marketing, with companies sending flyers, postcards, brochures, and other print materials directly to the homes of potential customers. Direct mail allows for highly targeted and personalized marketing messages, making it an effective way to reach specific demographic groups. Telemarketing has become less popular due to regulations and consumer aversion, while direct response mass media can be costly and less targeted. Emails are also widely used, but have lower response rates compared to direct mail.

Question 11

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 a true statement. Customer relationship management systems can help companies personalize their interactions with customers and increase customer loyalty, which can ultimately lead to higher sales and profits.

Question 12

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

This statement is true. The purpose of a loyalty or frequency program is to incentivize customers to continue purchasing and using the product or service by offering them additional value such as discounts, exclusive offers or rewards. By doing so, the program enhances the overall value of the product to the customer.

Question 13

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

Accepted Answer

A variable ratio reward schedule means that the reward is given after a variable number of responses, which has been shown to be more effective in maintaining the desired behavior than a fixed ratio reward schedule. This is because the unpredictability of the reward reinforces the behavior more effectively.

Question 14

Identify and describe the three primary types of data-driven marketing programs.

Accepted Answer

The answer of Identify and describe the three primary types...

Question 15

Morgan is the marketing manager for a small auto parts retailer. She wants to purchase a list that has the highest probability of producing sales. The best list for her to purchase would be a(n) ________ list.
A) response
B) internal customer
C) hot
D) compiled

Accepted Answer

A "hot" list consists of individuals or businesses that have recently shown interest or intent to purchase, making it the most likely to produce sales.

Question 16

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 17

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 18

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

Accepted Answer

Frequency programs often offer rewards or incentives to customers who make frequent purchases of luxury goods. This can encourage customers to put forth greater effort to obtain these goods, whereas they may be less motivated to do so for necessity items that they would purchase regardless.

Question 19

In purchasing a direct mailing list, a hot 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 hot list typically refers to individuals who have recently responded to a direct mail offer, often within a short timeframe like the last 30 days, indicating a higher likelihood of engagement.

Question 20

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 often have a significant impact on the effort individuals will put in to obtain it. Higher value rewards may motivate individuals to work harder or longer to achieve them.

Quiz 11: Database and Direct Response Marketing and Personal Selling

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

Selling products to customers without the use of other channel members is:

In purchasing a direct mailing list, a compiled list consists of individuals who have: