Deck 2: The History and Development of CRM

Question 1

Relationship marketing means that companies should find ways to maintain relationships with all customers because all customers are valuable to a company.

Answer 1

False

Question 2

Customer database marketing is the same as individualized marketing.

Answer 2

True

Question 3

Technology-enabled marketing, dialogue marketing and interactive marketing are all examples of customer database marketing.

Answer 3

True

Question 4

Nearly 250,000 magazines and journals can now be found on-line.

Question 5

Eddie Bauer found that customer who used the "channel triumvirate" bought ten times more than others.

Question 6

For many companies, CRM has meant nothing but massive outlays on information technology.

Question 7

Top management is often to blame for a company's lack of success with their CRM system.

Question 8

Supply-chain partners should not be included in a company's CRM effort.

Question 9

It has been reported that the success rate of CRM can be increased from 15% to 70% if a proper CRM strategy is adopted and CRM is "done right."

Question 10

Some feel that the most important reason companies are dissatisfied with their CRM efforts is due to their failure to establish clear business goals in the first place.

Question 11

Customer contact data erodes at a rate of 75% per year.

Question 12

CRM technology need not be expensive. Some systems can cost as little as $250.

Question 13

Relationship marketing is viewed as a paradigm shift that has reshaped the entire field of marketing.

Question 14

The creation of functional information silos enabling smooth data transfers within any organization was a major force that drove marketers to begin focusing on customer relationships.

Question 15

A root cause of CRM was the psychographic studies of the 1970s that led to a better understanding of customers and more efficient mass marketing.

Question 16

Diffusion of personal computers enabling divisions to analyze their own customer data contributed to the growth of CRM.

Question 17

CRM was aided by the media which continued to become more and more centralized enabling companies to effectively and efficiently reach customers.

Question 18

Despite major difficulties in development and execution, recent surveys show that more than 75% of all companies have experienced success with their CRM systems'

Question 19

Corporate culture and employee attitudes have not proven to be a detriment to CRM development for in most situations, companies and their employees relish the opportunity to better serve their customers.

Question 20

IT leaders are major determinants of CRM success because of their knowledge of technology as well as business unit needs.

Question 21

During CRM development, success is dependent upon creating data silos that will allow for smooth data interchanges.

Question 22

Studies of CRM implementation have found that the impact on customers is, in fact, greater than the impact on employees.

Question 23

CRM is applicable to all members in a vertically aligned network.

Question 24

Database construction has been found to be least difficult for firms who have indirect and infrequent interaction with their customers since the data is more manageable.

Question 25

When creating CRM systems, shifting the focus from products to customers is not a major problem since well-developed product management systems are often in place in most companies.

Question 26

CRM systems are too often tied to business goals without consideration of IT concerns.

Question 27

The establishment of a program management office to expedite CRM has not proven useful because it is generally not integrated with the rest of the company.

Question 28

Roughly how many magazines and journals can now be found on-line?

A)1500
B)5000
C)25000
D)100000
E)Nearly one million

Question 29

What is a channel triumvirate?

A)manufacturer, wholesaler, and retailer
B)a three-tiered, vertically-integrated channel
C)horizontal, concentric, and conglomerate channels
D)a combination of brick and mortar stores, catalogs, and the Internet
E)none of the above

Question 30

Which is NOT a reason that outcomes have been unsatisfactory for companies installing CRM solutions?

A)inadequate top-management support
B)no CRM champion within the organization
C)inadequate stochastic statistical frameworks
D)technology becomes a focus instead of the customer
E)all of the above are reasons that outcomes have been unsatisfactory

Question 31

Which is NOT a business goal for instituting a CRM system?

A)reducing high-value customer defections
B)increasing the number of efficient data-based silos
C)acquiring more customers
D)cross-selling services
E)increasing revenue and profit from customers

Question 32

Top management must be involved with a company's CRM initiative in all but which of the following ways?

A)meshing management science, IT, quantitative methods and marketing research with appropriate hardware solutions
B)setting philosophy behind the CRM effort
C)managing the company's culture change
D)presenting a detailed case for CRM benefits
E)setting goals for the system

Question 33

Which of the following does NOT apply to relationship marketing?

A)It is viewed as a paradigm shift that has reshaped the entire field of marketing.
B)It has paybacks for both the company and its customers.
C)It focuses on the sales transaction.
D)It focuses on maintaining long-term bonds.
E)It views personalized service as key.

Question 34

Which was NOT a force that drove marketers to begin focusing on customer relationships?

A)Technological advances in IT enabled companies to record transaction details.
B)Technological advances enabled companies to enter into dialogue with customers.
C)Direct marketing efforts enabled companies to enter into one-on-one relationships with their customers.
D)The creation of functional information silos enabled smooth data transfers within any organization.
E)Consultants pointed out that customer retention was the key to corporate profitability.

Question 35

Which was NOT a root cause of CRM?

A)customer satisfaction studies
B)extension of the productive relationships apparent within the B2B environment
C)psychographic studies that led to more efficient mass marketing
D)extension of technology implementation beginning with MRP and SAP
E)improvements in company call centers

Question 36

Which was NOT a root cause of CRM?

A)sales force automation tools captured customer and prospect information
B)campaign management tools helped contained excessive mass marketing costs
C)channel integration techniques gathered customer information from all touch points
D)diffusion of personal computers enabled divisions to analyze their own customer data
E)all of the above

Question 37

Which of the following was a root cause of CRM?

A)improvements in gathering of government census data
B)the success of direct-response marketing, such as direct-mail and toll-free calling
C)global integration of company data, making possible a 360 view of customers
D)ethnographic research, enabling companies to truly understand consumer behavior
E)all of the above

Question 38

Mass marketing techniques

A)continue to be cost effective based on companies' abilities to measure results.
B)are successful based on the continued pull of network television and mass oriented national magazines.
C)went out of vogue due to companies' inability to measure results.
D)became useful again through application of SFA and ERP.
E)are still the underlying force of CRM.

Question 39

Which business environmental factor did not lead to companies' use of CRM?

A)It was getting harder for companies to differentiate themselves through products and brands alone.
B)Companies looked to CRM to create close and intimate bonds with their customers.
C)Media continued to become more and more centralized enabling companies to effectively and efficiently reach customers.
D)The pace of life quickened, leading consumers to demand quicker and better service.
E)all of the above

Question 40

Which is true regarding companies' experiences with CRM?

A)More than 75% of all companies have experienced success with their CRM systems.
B)Less than half of all companies are satisfied with their CRM systems.
C)Companies are surprised to find CRM installation oftentimes comes in under budget.
D)CRM systems have been widely adopted by small and medium sized enterprises.
E)C and D are both true

Question 41

Which of the following is false regarding companies' experiences with CRM?

A)Targeted revenue goals, contrary to popular opinion, are most often achieved within 2 years of installation.
B)Most companies do not have clearly stated goals for their CRM systems.
C)Charles Schwab recouped its costs more quickly than expected.
D)The real barrier to effective CRM installation is corporate culture.
E)all of the above are true

Question 42

The barriers to CRM system installation include all but which of the following?

A)corporate culture
B)employee attitudes
C)lack of a strategic plan for CRM
D)extraordinary amount of time involved to install CRM systems
E)all of the above

Question 43

Which of the following is NOT a barrier to effective CRM installation

A)a large number of stakeholders are involved
B)structural changes involved
C)executive concerns about payback
D)skeptical salespeople
E)companies focus on individuals as opposed to the mass market

Question 44

With respect to CRM systems

A)salespeople generally look forward to new technology making their job easier.
B)executives worry about how to manage their business during implementation.
C)data silos will be created allowing for smooth data interchanges.
D)employees generally look forward to a new challenge.
E)all of the above

Question 45

Which of the following is, in fact, a way that organizations can overcome barriers to effective CRM implementation?

A)break data marts into more manageable data warehouses
B)establish a plan for quantifying goals and objectives
C)initiate implementation at the channel level
D)establish IT as lead development implementer
E)A, C and D are correct

Question 46

Studies on CRM implementation have found

A)that the impact on customers is, in fact, greater than impact on employees.
B)that 18 months is required on average for successful CRM implementation.
C)that implementation is more successful when IT and business managers work together.
D)that lead IT groups with a CRM focus lead to more efficient implementation when not encumbered by business managers who lack IT background.
E)that the average amount spent on CRM systems for SMEs is $180,000.

Question 47

Studies on CRM implementation have found that

A)contrary to popular belief, direction begins from the bottom-up.
B)those closest to the customer should design the system.
C)IT opinion leaders will make or break the system.
D)companies spend too much time on developing performance metric standards.
E)all of the above are false

Question 48

A more expansive notion of CRM includes more constituencies than merely customers. Which of the following is NOT typically covered in the expanded notion of CRM?

A)suppliers
B)distributors
C)household and industrial customers
D)facilitating agencies
E)all are covered

Question 49

Which is FALSE?

A)CRM is applicable to all members in a vertically aligned network.
B)CRM is applicable to all members in a valued added partnership.
C)CRM has been expanded and is often referred to as PRM.
D)Because CRM has its roots in SAP, employees are now considered part of the VAN.
E)all of the above are true

Question 50

Select the INCORRECT statement. Campaign management tools

A)were introduced to contain the growing costs associated with media buys.
B)have basically become obsolete with the growth of e-business.
C)enable companies to design and coordinate promotional programs.
D)enable companies to forecast financial results.
E)all of the above are true

Question 51

Database construction is

A)easiest for firms having infrequent interaction with their customers.
B)easiest for firms having infrequent and indirect customer interaction.
C)easiest for firms having frequent and direct customer interaction.
D)most difficult for firms in VANS and PRMS.
E)easiest for firms having data silos.

Question 52

Which is INCORRECT? Relational databases contain

A)customer transaction histories.
B)all customer contacts through any channel.
C)demographic and behavior information.
D)customer response to company campaigns.
E)all are correct

Question 53

Which is a true finding with respect to the establishment of CRM systems?

A)Shifting the focus from products to customers is not a major problem since product management systems are often in place.
B)Marketing, sales, and even engineering should act on data collect by the customer contact center.
C)Customer information should never be disseminated to those outside the company in the distribution channel.
D)Top management is generally unwavering in its support of CRM establishment.
E)all of the above are true

Question 54

Legacy systems

A)can impede company-wide CRM development.
B)are generally developed by an IT task force.
C)are what every organization strives for in CRM development.
D)are best practice attempts at CRM.
E)C and D are correct

Question 55

CRM systems

A)should emphasize platform technology first and problem solving second.
B)should be functional in nature.
C)are too often tied to business goals without consideration of IT concerns.
D)work best in functional silos.
E)sometimes consist of CRM suites or CRM point solutions.

Question 56

With respect to CRM systems

A)technical integration leads to performance integration.
B)CRM systems should benefit marketing, sales, customer service, advertising, IT, and many other departments.
C)the "big-bang" approach has proven more successful than a piece-meal approach.
D)cost-benefit analysis is not needed since implementation has shown benefits always outweigh costs.the "big-bang" approach has proven more successful than a piece-meal approach.
E)both B and D are correct

Question 57

"Quick-results" CRM benefits companies in many ways. Which of the following is NOT one of the benefits?

A)it places IT in the lead
B)users get to "test the water"
C)it avoids culture shock
D)it avoids information overload
E)it combats disenchantment

Question 58

Which of the following is true concerning CRM development?

A)Marketing and sales must direct IT in terms of what customer data to collect.
B)The establishment of a program management office to expedite CRM has not proven useful because it is generally not integrated with the rest of the company.
C)The best sequence of development is functional users set goals and objectives for the system, IT leads development, and a program management office assesses results.
D)Plan from the bottom-up not the top-down.
E)Costs generally run 3.5 times their estimate.

Question 59

Difficulties in integrating customer data include all but which one of the following?

A)disparate databases
B)multiple touch points
C)inconsistent and old customer data
D)dissimilar applications
E)idiosyncratic-fit

Question 60

Which of the following CANNOT serve as an indicator of CRM effectiveness?

A)changes in revenue
B)changes in margins
C)change in hierarchy of origin
D)change in customer satisfaction
E)they can all serve as indicators of effectiveness

Question 61

The main touch point for customers is

A)marketing research.
B)survey data.
C)ATMs.
D)CCC.
E)product manager.

Question 62

VAPs are

A)value added producers.
B)vertically aligned producers.
C)vertically aligned partners.
D)very able partners.
E)none of the above