Question 1

Forrester Research Inc. found that 30% of Fortune 1000 firms had no metrics for their CRM projects.

Accepted Answer

Forrester Research Inc. did find that 30% of Fortune 1000 firms had no metrics for their CRM projects.

Question 2

As companies lose customers, their customer satisfaction scores fall.

Accepted Answer

Customer satisfaction scores are based on the opinions and feedback of the customers a company still has, not those who have left. A company could lose dissatisfied customers and potentially see an increase in satisfaction scores if the remaining customer base is more satisfied.

Question 3

Customers realize that if they switch brands, they will probably experience no loss in quality.

Accepted Answer

This statement implies that there is little differentiation in quality between competing brands, indicating that customers may not perceive much of a difference if they switch.

Question 4

AT&T found that perceived value, not satisfaction or loyalty, was a better measure of retention.

Accepted Answer

AT&T found that customers who perceive high value in their service are more likely to remain loyal and continue using their services, regardless of their satisfaction levels. Therefore, perceived value is a better predictor of retention than satisfaction or loyalty alone.

Question 5

Customers who participate in satisfaction surveys register lower satisfaction scores because of the imposition.

Accepted Answer

Participation in satisfaction surveys does not inherently lead to lower satisfaction scores; satisfaction levels are influenced by the customer's experience with the product or service, not by the act of completing a survey.

Question 6

The best measure of future customer value is past customer value.

Accepted Answer

Past customer value can indicate potential future value, but it does not account for changes in customer behavior, market conditions, or company offerings that could alter future value.

Question 7

RFM stands for recency, frequency and monetary value.

Accepted Answer

RFM stands for recency, frequency and monetary value.

Question 8

Developing closer bonds, avoiding defection, changing behavior could all be types of retention.

Accepted Answer

These are all types of retention strategies aimed at keeping customers/employees engaged and committed to a company or organization.

Question 9

It has been shown that if a company wants to increase CLV, acquisition measures have a greater effect than customer retention.

Accepted Answer

According to research, customer retention has a greater impact on CLV than customer acquisition. While acquisition may bring in new customers, it can be expensive and may not result in long-term loyalty. On the other hand, retaining existing customers through excellent service and personalization can lead to increased CLV over time.

Question 10

NPS stands for Net Product Score.

Accepted Answer

NPS stands for Net Promoter Score, not Net Product Score.

Question 11

Jill Dyche reported that 90 percent of the 50 largest CRM users admitted they were unable to quantify a return on their CRM investment.

Accepted Answer

Jill Dyche reported that 90 percent of the 50 largest CRM users admitted they were unable to quantify a return on their CRM investment, as per the statement.

Question 12

The Giga Information Group found that only 30 percent of companies involved in CRM deployment measured benefits

Accepted Answer

The statement is true, as per the findings of the Giga Information Group.

Question 13

Different effectiveness measures are needed for company CRM efforts focusing on acquiring new customers than efforts focusing on cross-selling and up-selling to current customers.

Accepted Answer

Acquiring new customers and cross-selling/up-selling to current customers are two distinct efforts that require different strategies and tactics, thus different effectiveness measures are needed to evaluate their success. Acquiring new customers may focus on metrics such as conversion rate, cost per acquisition, or customer lifetime value, while cross-selling/up-selling efforts may be measured through metrics such as incremental sales, customer retention rate, or average order value.

Question 14

The vast majority of CRM effectiveness measures can be grouped into four important and distinct areas: customer cycle measures, company 3E measures, customer and company worth measures, and competitive strength measures.

Accepted Answer

The answer of The vast majority of CRM effectiveness measures...

Question 15

Some useful measures of customer acquisition effectiveness include size of wallet, share of wallet, and share of category.

Accepted Answer

While size of wallet, share of wallet, and share of category are important metrics for evaluating customer loyalty and retention, they are not typically used as measures of customer acquisition effectiveness. Common measures for customer acquisition include cost per acquisition (CPA), conversion rate, and customer lifetime value (CLV).

Question 16

Company "3E" CRM effectiveness measures consist of company efficiency, effectiveness and employee behavior.

Accepted Answer

The statement accurately describes the effectiveness measures used by company "3E" for their CRM system.

Question 17

When using a 5 point rating scale to measure customer satisfaction (where a "5" denotes highest satisfaction) it is perhaps more important for companies to move customers from 2 and 3 levels to a 4 as it is to move customers at a 4 to level 5.

Accepted Answer

The answer of When using a 5 point rating scale...

Question 18

Xerox found that customer who rated their services a "4" were almost as likely to repurchase Xerox products over the next 18 months as those who rated their service a "5".

Accepted Answer

The answer of Xerox found that customer who rated their...

Question 19

SERVQUAL is a 22 item instrument for assessing customer perceptions of service quality.

Accepted Answer

SERVQUAL is a 22 item instrument for assessing customer perceptions of service quality.

Question 20

The acquisition, yield and capture rates are all the same; namely, the number of prospects acquired divided by the total number targeted.

Accepted Answer

The statement is true. Acquisition, yield, and capture rates all refer to the number of prospects acquired in relation to the total number targeted, so the calculation is the same for all three.

Quiz 12: CRM Program Measurement and Tools

Forrester Research Inc. found that 30% of Fortune 1000 firms had no metrics for their CRM projects.

As companies lose customers, their customer satisfaction scores fall.

Customers realize that if they switch brands, they will probably experience no loss in quality.

AT&T found that perceived value, not satisfaction or loyalty, was a better measure of retention.

Customers who participate in satisfaction surveys register lower satisfaction scores because of the imposition.

The best measure of future customer value is past customer value.

RFM stands for recency, frequency and monetary value.

Developing closer bonds, avoiding defection, changing behavior could all be types of retention.

It has been shown that if a company wants to increase CLV, acquisition measures have a greater effect than customer retention.

NPS stands for Net Product Score.

Jill Dyche reported that 90 percent of the 50 largest CRM users admitted they were unable to quantify a return on their CRM investment.

The Giga Information Group found that only 30 percent of companies involved in CRM deployment measured benefits

Different effectiveness measures are needed for company CRM efforts focusing on acquiring new customers than efforts focusing on cross-selling and up-selling to current customers.

The vast majority of CRM effectiveness measures can be grouped into four important and distinct areas: customer cycle measures, company 3E measures, customer and company worth measures, and competitive strength measures.

Some useful measures of customer acquisition effectiveness include size of wallet, share of wallet, and share of category.

Company "3E" CRM effectiveness measures consist of company efficiency, effectiveness and employee behavior.

When using a 5 point rating scale to measure customer satisfaction (where a "5" denotes highest satisfaction) it is perhaps more important for companies to move customers from 2 and 3 levels to a 4 as it is to move customers at a 4 to level 5.

Xerox found that customer who rated their services a "4" were almost as likely to repurchase Xerox products over the next 18 months as those who rated their service a "5".

SERVQUAL is a 22 item instrument for assessing customer perceptions of service quality.

The acquisition, yield and capture rates are all the same; namely, the number of prospects acquired divided by the total number targeted.