Deck 10: Customer Relationship Management

Question 1

While a well-planned and organized CRM initiative can be extremely useful in developing effective and efficient marketing programs for retailers, they are not particularly helpful for manufacturing companies like GM since their touches with the customer are few.

Answer 1

False

Question 2

Safeguarding customer information is a legal and ethical responsibility for any company collecting, processing, and transmitting sensitive customer data.

Answer 2

True

Question 3

Customer lifetime value is calculated as the net present value of an annuity.

Answer 3

True

Question 4

Today, successful CRM applications will be measured by the personal value created for the users.

Question 5

Segmenting customers on the basis of things like products purchased, sales history, demographic information, and desired product features can dilute the results of a CRM program.

Question 6

Until recently, CRM was not very effective for most companies because it didn't focus on building customers' trust and loyalty, or building strong relationships with customers.

Question 7

Customers of companies that use CRM applications, should not be concerned with their personal information becoming compromised or being shared with other companies, because of the law.

Question 8

Sales force automation products manage a sales person's accounts, business opportunities, and communications.

Question 9

According to the text, poor planning is typically the cause of most unsuccessful CRM initiatives.

Question 10

Continuous connectivity is desired by many users of CRM applications, however this is still something the systems can't deliver yet.

Question 11

While a company's Internet presence may be desirable for finding information or conducting product transfers, touching products and talking face-to-face with company representatives remains an integral part of the supplier-customer interface.

Question 12

Through the use of permission marketing programs, customers are allowed to select the type of communications that companies can make with them.Actually, customers can even choose to be completely eliminated from both e-mail and traditional mailing lists.

Question 13

The use of small data makes CRM systems less successful.

Question 14

When web sites suggest other items for purchase based on already purchased items, this is an example of Clickstream Selling.

Question 15

The three inputs for calculating Customer Lifetime Value are Average Annual Sales, Expected Lifetime and Forecasted Profits.

Question 16

Only employees who will be entering CRM data should be involved in the CRM implementation plan.

Question 17

According to the text, customer relationship management refers to building and maintaining profitable long-term customer relationships.

Question 18

As customers navigate through a company's website, CRM software can record and analyze the customer's clickstream so website images and ads can be tailored to the needs and desires of that one individual customer.

Question 19

Small data is the data that was around before big data.

Question 20

The objectives of any CRM initiative should be focused on what the company can reasonably achieve.

Question 21

Which of the following are required elements of an effective CRM initiative?

A) Sending out promotional materials via e-mails and traditional mail to a large random group of a potential customers
B) Cross-selling customers after an initial purchase
C) Preserving a traditional sales force that communicates with the supply-chain members
D) All of these

Question 22

The use of quick response codes (QR Codes) to retrieve marketing information is a type of:

A) Geographic marketing
B) Target marketing
C) Customer churn
D) Mobile marketing

Question 23

The element of a CRM program involved with the use of data-mining software and customer behavior analytics is:

A) Segmenting customers
B) Predicting customer behaviors
C) Customer value determination
D) Customer preference determination

Question 24

A firm offers group discount for orders exceeding 15.Two firms are taking advantage of this offer.Sales to Company A averages $15, 000 of annual sales, has a 22% profit margin and an expected lifetime of 8 years.Company B averages $11, 000 of annual sales, has a 25% profit margin and an expected lifetime of 9 years.Which is the more important customer based on the higher expected lifetime value? Assume a 7% discount rate.

A) Company A because its' NPV = $17917
B) Company A because its' NPV = $19705
C) Company B because its' NPV = $21,224
D) Company B because its' NPV = $22,349

Question 25

Which of the following customer service elements can be classified as an example of posttransaction elements?

A) Salesperson politeness
B) Customer complaint resolution
C) Customer service policies
D) The company's choice of organizational structure

Question 26

When an organization attempts to offer the right products and services to customers at the right time through the offer of individual promotions tied to specific events like birthdays and anniversaries, this is referred to as:

A) Event-based marketing
B) Segmented selling
C) Personal holiday marketing
D) Extreme segmentation marketing

Question 27

Your company allows customers to "opt-out" of receiving email advertisements.This is referred to as:

A) Event-based marketing
B) Permission marketing
C) Customer churn
D) Customer preference marketing

Question 28

The online retailer Ecatalog.com has decided to send consumers of the new John Grisham book an e-mail with suggestions for books with similar themes and has also offered them a 20% discount if those suggested books were purchased.This type of marketing/promotion is an example of:

A) Target marketing
B) Segmented selling
C) Clickstream selling
D) Cross-selling

Question 29

Tire manufacturer Firebridge sells tires to retail firm A.Average annual sales for firm A is $55,000.Average profit margin is 15%.The expected lifetime is 10 years.Using a discount rate of 15 percent, calculate the Customer Lifetime Value of firm A and choose the closest answer below:

A) $5,500
B) $38,590
C) $41,405
D) $25,675

Question 30

You are a manager at Sunnydale Appliances.A customer who recently purchased a dishwasher contacts you with a problem and requests warranty information.According to the text, this is an example of:

A) Probable customer churn
B) Posttransaction customer service
C) Transaction customer service
D) Pretransaction customer service

Question 31

You work for a company that segments customers by demographic information, and then markets specifically to those customers who are located in the Los Angeles area.This is an example of:

A) Target marketing
B) Cross-selling
C) Geographic marketing
D) Personalized customer communication

Question 32

A customer's lifetime value is calculated by:

A) Summing the projected annual profitability of the customer
B) Summing the annual sales of the customer and then dividing by the projected lifetime
C) The firm's MRP system
D) Finding the NPV of a customer's projected lifetime profits for the firm

Question 33

Your top sales executive leaves your company to work for a competitor.Fortunately, all of her notes regarding prior dealings with customers have been captured in a:

A) Sales activity management system
B) Sales territory management system
C) Lead management system
D) Knowledge management system

Question 34

All of the following are required elements for the development of an effective CRM initiative EXCEPT:

A) Segmenting customers
B) Customer value determination
C) Utilization of MRP
D) Personalizing customer communications

Question 35

All of the following are recommended for designing and implementing a successful CRM program EXCEPT:

A) Support from the firm's top executives
B) Expect employees to 'learn on the job' and adapt their way of working
C) Knowledge of the tools available to aid in CRM
D) Continuous awareness of customers' changing requirements

Question 36

Why do so many CRM programs fail?

A) They are so expensive that it is hard to recover the investment
B) They take the firm away from concentrating on their key suppliers
C) Because of incompatible information and communication systems
D) Firms concentrate more on the CRM software instead of taking care of customers

Question 37

A system which allows sales managers to obtain current information and reporting capabilities regarding each salesperson's activities on each customer's account is referred to as a:

A) Sales activity management system
B) Sales territory management system
C) Lead management system
D) Knowledge management system

Question 38

Companies work very hard to reduce the number of customers who don't return.This customer defection is often referred to as:

A) Customer churn
B) Clickstream defection
C) Balking
D) Revenue Exodus

Question 39

CRM systems allow organizations to identify which customers have stopped purchasing products or services, so that the organization can target those former customers for future promotions and/or perhaps to investigate why they stopped purchasing in the first place.This CRM attribute is called:

A) Customer profitability determination
B) Customer-base retention initiative
C) Customer defection analysis
D) Customer clickstream analysis

Question 40

Which of the following is one of the most basic and important activities of CRM?

A) Segmenting customers
B) Cross-selling customers
C) Increasing churn
D) Finding customers

Question 41

A practical independent measure firms can take to improve information security is:

A) Eliminate employee internet use at work
B) Do not collect information about their customers
C) Continuously monitor employee desktop applications, e-mails and phone calls
D) None of these

Question 42

For the information given, rank the two customers in terms of their customer lifetime value.

Use a discount rate of 8 percent and treat the average sales figures as annuities.

Question 43

Firms can safeguard customer information by doing which of the following?

A) Allow customers to opt-in and out of mailing lists
B) Allow customers to access their accounts online to view information collected about themselves
C) Both A & B
D) None of these

Question 44

CRM systems today require less training because:

A) The systems don't do as many things as they used to.
B) They are designed to be more user-friendly
C) Pre-purchase training sessions have become very sophisticated
D) All of the above

Question 45

Which of the following is a U.S.law which requires compliance by all firms engaged in handling customer information?

A) The Customer Loyalty Law
B) The Data Protection Act
C) The Internet Privacy Law
D) The U.S. Patriot Act

Question 46

A CRM program primarily attempts to monitor and/or manage three things: an organization's customers, sales force, and customer service level.
List two different tools or components of CRM for each of three areas:
a.Customers
b.Sales Force
c.Customer Service Level
Describe how each tool or component is utilized in the monitoring and/or managing of the customers, sales force, or customer service level.

Question 47

When CRM applications are available 24/7 on smartphones, tablets, and desktops, this is referred to as:

A) A high-service application
B) Smart CRM
C) All-time CRM
D) Continuous connectivity

Question 48

A good CRM program is only good if it is successfully implemented.Describe three important elements a firm should consider when designing and implementing a CRM program.

Question 49

Creating a good CRM plan is necessary prior to purchasing a CRM system.Briefly describe a CRM plan.

Question 50

The textbook describes a perfect order as one in which all of seven of the rules in the "Seven Rs Rule" are satisfied.List five of the seven R's.

Question 51

Users in a company can retrieve and study a large amount of information about consumers by housing that information in a centralized database that is commonly referred to as a:

A) Clickstream cloud
B) QR code site
C) Data warehouse
D) Social media site

Question 52

Define THREE of the goals of the common CRM program.How does CRM software attempt to achieve each of these goals?

Question 53

Because a large number of CRM applications exist, integrating these in one company can be problematic.Briefly describe the issue and discuss how integration can be achieved.