Question 1

Customer service representatives can use an individual's lifetime value to determine how he/she should interact with the customer.

Accepted Answer

Customer lifetime value (CLV) is a metric that determines the total value of a customer over the course of their lifetime. By using this metric, customer service representatives can gauge how much time and effort should be devoted to each individual customer to maximize their satisfaction and loyalty. Therefore, they can adjust their interaction strategies accordingly based on the customer's CLV.

Question 2

When customers make contact with a company, the customer's profile, history, and other information contained in the database should be available to the company contact person as he or she deals with the customer.

Accepted Answer

This statement is true. Customers expect companies to have access to their profiles and history when they interact with them. This allows for a more personalized and efficient customer service experience. Companies can achieve this by maintaining a comprehensive customer database that can be accessed by authorized personnel.

Question 3

Customer contact personnel with a company should not allow the lifetime values of individual customers to affect the way they deal with a customer since every customer should be treated equally.

Accepted Answer

Customer lifetime value is an important metric for businesses and can play a role in how customer contact personnel interact with customers. Customers who have a higher lifetime value may receive more personalized attention or offers in order to retain their business. However, this does not mean that every customer should not be treated equally with respect and professionalism.

Question 4

A database marketing program provides the tools to personalize messages and keep records of the types of communications that work and those that do not work.

Accepted Answer

A database marketing program allows businesses to collect and analyze customer data to create targeted marketing messages and track their effectiveness. This helps tailor communications to individual customers and improve overall marketing strategy.

Question 5

Data mining normally involves building profiles of consumer groups and preparing models that predict future purchase behaviors.

Accepted Answer

Data mining does involve building profiles and models for consumer behavior prediction.

Question 6

In developing data-driven communications with customers, maintaining customer profile information is important because the information helps the marketing team create personalized communications.

Accepted Answer

Customer profile information provides insights into the customer's preferences, behavior, and demographics, which can be used to tailor communications to their specific needs and interests. This personalization can lead to increased engagement and ultimately, higher customer satisfaction and loyalty.

Question 7

When a customer makes a purchase over the Internet, the only communication that is important is sending them a thank you and acknowledgment of the order.

Accepted Answer

While sending a thank-you and acknowledgment of the order is important, there may be other important communication such as shipping updates, potential delays, or follow-up surveys. Additionally, good customer service may involve responding to any questions or concerns the customer may have during or after the purchase process.

Question 8

The primary reason for building a database, coding the information, and data mining is to use the output to build programs that will boost sales revenues.

Accepted Answer

While building a database, coding the information, and data mining can provide valuable insights that can inform decisions and improve business operations, the primary goal is not necessarily always to boost sales revenues. Other potential goals include improving efficiency, reducing costs, enhancing customer experience, and gaining competitive advantages.

Question 9

The most common database-driven marketing programs are permission marketing, frequency programs, and customer relationship management efforts.

Accepted Answer

Yes, permission marketing, frequency programs, and customer relationship management efforts are all common examples of database-driven marketing programs.

Question 10

Through data mining a company can build a profile of its best customers, which can then be used to identify prospective new customers or upgrade current customers to a higher level of purchasing.

Accepted Answer

Data mining can be used to analyze customer data and create a profile of the most valuable customers. This profile can then be used to target similar customers for marketing purposes or to identify opportunities to increase the value of existing customers by offering them more personalized products or services.

Question 11

A retailer can use data mining to determine when to mark merchandise down and how much to mark it down.

Accepted Answer

Data mining can help retailers analyze sales patterns and identify which merchandise is selling slowly. This data can be used to determine the optimal time and amount to mark down the price in order to increase sales and clear out inventory.

Question 12

Personalized communications with customers through database information builds relationships and leads to both repeat purchases and customer loyalty.

Accepted Answer

Personalized communications allow customers to feel valued and understood, which leads to a stronger connection with the brand and a higher likelihood of repeat business and loyalty. This can be achieved by using information from a company's customer database, such as purchase history and preferences, to tailor marketing messages and offers to individual customers.

Question 13

Data mining and data coding of a firm's database can help a firm develop more personalized marketing communications and marketing programs.

Accepted Answer

Data mining and coding of a firm's database can reveal customer insights and preferences that can be used to tailor marketing communications and programs to their specific needs and interests.

Question 14

Faith received an e-mail from Volkswagen exactly one year after she purchased her Volkswagen. The company thanked her for her purchase and encouraged her to access the company's website, which is an example of trawling.

Accepted Answer

Trawling is the practice of searching the internet for specific information about individuals or organizations. In this case, Volkswagen is using Faith's purchase information to send her a targeted e-mail and encourage her to visit the company's website.

Question 15

Trawling is the process of coding data files with lifetime values and customer cluster codes.

Accepted Answer

Trawling is actually the process of dragging a fishing net or trawl through the water in order to catch fish. In data analysis, the term "trawling" may refer to a method of exploratory data analysis where large amounts of data are searched for patterns or associations without a specific hypothesis in mind. The process described in the statement is more closely related to data coding and customer segmentation.

Question 16

Ariana moved to a new apartment. She soon received a letter from Bed, Bath, and Beyond containing a coupon for merchandise she may need in her new apartment, which is an example of trawling.

Accepted Answer

Trawling refers to the activity of searching or browsing through a large quantity of online information, often for marketing purposes. In this case, Bed, Bath, and Beyond has sent Ariana a coupon based on the assumption that she may need new merchandise for her new apartment, indicating that they have trawled through their customer database to identify potential opportunities for marketing.

Question 17

A sporting goods store could use customer clustering to group customers based on the type of sporting goods they purchased, such as fishing supplies, hunting supplies, and so forth.

Accepted Answer

Customer clustering can be used to group customers based on their purchasing behavior, and in the case of a sporting goods store, it could be used to categorize customers based on the type of sporting goods they buy. This information can be used to tailor marketing strategies and promotions to specific customer segments.

Question 18

A permission marketing program means promotions are only sent to customers that ask for them.

Accepted Answer

Permission marketing is a strategy of sending promotional messages only to customers who have given their consent or expressed interest in receiving such messages. It involves building a relationship with customers based on trust and delivering relevant content that adds value to their lives.

Question 19

In developing data-driven communications with customers through Web visits, identification codes allow a visitor to register with the site through an ID name or number and a password.

Accepted Answer

Identification codes are commonly used to allow visitors to register with a site and create an account with a unique ID name or number and password for data-driven communications.

Question 20

Coding of customer data can produce information that can be used to group customers into clusters based on a wide variety of criteria.

Accepted Answer

Coding of customer data can be used to group customers into clusters based on various criteria such as demographic information, purchase behavior, and preferences.

Quiz 11: Database and Direct Response Marketing and Personal Selling