Deck 11: Customer Relationship Management

Question 1

Before Emily started her transaction at a retailer,she was asked by the cashier for her phone number.This practice is gathering _______.

A)share of wallet
B)identifying information
C)biometrics
D)loyalty likelihood
E)cookies

Answer 1

B
Explanation: Some retailers have the sales associates ask customers for identifying information when they process a sale.This information is then used to link all applicable transactions to the customer.

Question 2

_______________ to the retailer indicates that customers are committed to purchasing merchandise and services from the retailer regardless of competing retailers' enticements.

A)Customer commitment
B)Customer loyalty
C)Customer satisfaction
D)Customer attitudes
E)Customer interest

Answer 2

B
Explanation: Loyal customers have a bond with the retailer and the bond is based on more than a positive feeling about the retailer.

Question 3

What is the easiest way for retailer that has a CRM program to determine the location of new stores?

A)ask customers where they shop
B)review the customer database to see where customers live
C)track sales in stores
D)track Internet sales
E)distribute customer surveys asking customer store preferences

Answer 3

B
Explanation: The customer database contains transactions,customer contacts,customer preferences,descriptive information,such as demographic and psychographic data,and responses to marketing activities making it easier to determine where the customers live that would most likely patronize a store.

Question 4

Which of the following would NOT be considered part of the customer database?

A)a customer's income
B)a customer's size
C)whether the customer shopped on the retailer's website
D)whether the customer responded to a recent promotion
E)whether the customer patronized a competitor

Question 5

To be fair,retailers must provide the same frequent buyer perks to all customers.

Question 6

Providing restrooms for customers is considered to be part of a retailer's customer relationship management.

Question 7

Converting iron and gold customers into platinum customers is called customer alchemy.

Question 8

Which of the following is supportive of customer loyalty?

A)It is customers making repeat visits to a retailer and being satisfied with their experiences.
B)It is when customers purchase merchandise and services from the retailer because of their convenient location.
C)It is an emotional connection between a retailer and a customer.
D)It is the state of accumulated transactions that customers build through repeat purchases responding to various promotions to a retailer.
E)It is the sole result of superior customer service.

Question 9

An objective of CRM programs is to convert customers who made infrequent small purchases into repeat customers and eventually high value customers.

Question 10

Which of the following does NOT describe the customer relationship management which retailers implement?

A)Retailers consider that all customers are not equally profitable.
B)Retailers treat customers differently.
C)Retailers concentrate on providing more value to their best customers using targeted promotions.
D)Retailers provide more value to their best customers.
E)All of the above describe customer relationship management.

Question 11

The customer lifetime value (CLV)is the expected contribution from the customer to the retail's profits over his or her entire relationship with the retailer.

Question 12

The first step in the CRM process is ______.

A)analyzing data
B)collecting customer data
C)developing CRM programs
D)implementing programs
E)none of the above

Question 13

Developing retail programs for small groups or individual customers is referred to as 1-to-1 retailing.

Question 14

Frequent shopper programs are expensive to implement and manage.

Question 15

CRM is based on the philosophy that retailers can increase their profitability by ___.

A)providing better assortments
B)expanding their services
C)building relationships with their better customers
D)extending hours of operation
E)advertising more

Question 16

It is clear that CRM programs increase customer spending and loyalty.

Question 17

Most retailer's strategy is to sell to anyone that will buy from them rather than to just a certain segment of the population.

Question 18

In the past,retailers used mass media advertising and price promotions to all customers.Now,they are beginning to provide more value to their best customers by using targeted promotions to increase their ________.

A)open wallet syndrome
B)share of wallet
C)customer base
D)profit sharing
E)customer share

Question 19

A specific type of data analysis that focuses on the composition of the bundle of merchandise purchased by a household during single shopping occasion is called a market basket analysis.

Question 20

A business philosophy and set of strategies,programs,and systems which focuses upon identifying and building loyalty with a retailer's most valued customer is called ______.

A)customer loyalty management
B)strategic relationship management
C)most valued customer management
D)strategic consumer management
E)customer relationship management

Question 21

Which of the following best describes the type of data analysis that focuses on the composition of products purchased by a household during a single shopping occasion?

A)allotment analysis
B)market basket analysis
C)location analysis
D)shopping cart analysis
E)merchandising analysis

Question 22

Electronic retailers can collect transaction data for their data warehouse,but they can also collect information by placing cookies on a visitor's hard drive.What is a cookie?

A)a virus
B)a frequent shopper reward
C)text files that identify pirated software
D)text files that identify visitors when they return to a website
E)text files used to determine demographic information

Question 23

Which of the following is NOT one of principles that the Federal Trade Commission (FTC)practices?

A)notice and awareness: covers the disclosure of information practices
B)prohibit/prevent companies from sharing their customers' personal information
C)choice/consent: includes both opt-out and opt-in options
D)access/participation: allows for the confirmation of information accuracy by consumers
E)integrity/security: controls for the theft of and tampering with personal information

Question 24

__________ are applications of statistical techniques and models to find patterns in customer purchases data and make recommendations for improving the effectiveness of retailers.

A)Retail analytics
B)Redress analytics
C)Strategic analytics
D)Information drafts
E)Data clones

Question 25

When consumers agree to share personal information,it is referred to as _______.

A)participatory knowledge
B)opting in
C)public information
D)getting out
E)opting out

Question 26

Why is constructing a customer database more difficult for in-store transactions than it is for on-line shopping?

A)Customer returns to the store confound the data.
B)Store purchases can be made with cash.
C)Availability of store assortments is not always similar to website assortments.
D)Store customers are not interested in sharing personal information.
E)Since customers may be more likely to buy gifts for others in stores than online,it defeats the purpose of understanding the end-user.

Question 27

When Lana went to Amazon.com to see if they had any new books about health and wellness,the first thing she saw was a personalized greeting.Which of the following best describes how Amazon.com knew it was Lana?

A)She ordered before and told them her name.
B)Her name is on all of her shipments as well as her address.
C)She used a password.
D)Another retailer sold her private information to Amazon.com.
E)Amazon.com placed cookies on her hard drive to identify her when she visits.

Question 28

If a U.S.retailer wants to conform to the European policies concerning how customer information is collected,it should adopt which type of policy?

A)opt in
B)opt out
C)opt private
D)opt EC
E)It should not have a policy

Question 29

Many products in a supermarket can be found in more than one place throughout the stores.What type of retail analytics is used to decide where to place products in a store?

A)supermarket analysis
B)market basket analysis
C)location analysis
D)shopping cart analysis
E)merchandising analysis

Question 30

When Mary purchased some caulk for her windows at Home Depot,the cashier asked for her telephone number at the point-of-sale.What was the retailer doing by asking this question?

A)The retailer was determining her level of trust in the store.
B)The retailer was identifying her preference.
C)The retailer was collecting data for its database.
D)The retailer was curious as to how many people from that area code shopped the store.
E)The retailer was confirming forecasts for buyers.

Question 31

Customers become Kohl's Most Valued Customer (MVC)by spending at least $600 on their Kohl's Charge every year (from February through January),receive extra exclusive benefits.Kohl's is utilizing their private-label credit card also as ______.

A)special customer service
B)a form of personalization
C)a customer loyalty program
D)an exclusive value share program
E)a sense of community

Question 32

When consumers are asked by a retailer and explicitly tell the retailer not to use their personal information,they are _________.

A)choosing/consenting
B)opting in
C)opting out
D)declining public domain statutes
E)notifying consumer information services

Question 33

Why are concerns about privacy heightened for customers who use the electronic channel while they shop?

A)Electronic retailers ask for more information than necessary for a simple transaction.
B)Consumers are concerned about their credit card security.
C)Because a large amount of information can be collected without the consumer's knowledge.
D)Consumers are concerned as to how the information is shared.
E)Consumers are concerned about identity theft.

Question 34

Although having information about individual customers provides more benefits to their better customers,consumers are concerned about ________.

A)price promotions
B)loyalty
C)descriptive information
D)privacy
E)data mining

Question 35

Which of the following correctly describes the practices which protect customer privacy?

A)In the United States,Americans rely upon federal government to protect consumer privacy.
B)Current legislation in the U.S.for consumer privacy forces strict protection of consumer privacy in retailing.
C)The United States have more stringent consumer privacy laws than the European Union.
D)In the EU,the opt-out policy is applied when consumers' personal information is collected and used.
E)In the U.S. ,personal information is generally viewed as being in the public domain,and retailers can use it in any way they desire.

Question 36

Wilbur uses a Books-A-Million customer card,a Kash-N-Karry customer card,a Blockbuster customer card,and a Sandwich Shop customer card when he shops at any of these retailers.Each time he uses them,they reward him with reduced cost,free merchandise or a credit.These cards are examples of:

A)store credit cards
B)identification cards
C)frequent shopper cards
D)third-party credit cards
E)frequent membership cards

Question 37

Which of the following is NOT TRUE regarding frequent shopper programs?

A)Frequent shopper programs are programs that identify and provide rewards to customers who patronize a retailer.
B)Frequent shopper programs are also commonly called loyalty programs.
C)When retailers in the United States issue customers a frequent shopper card,the companies are legally required to obtain the customers' permission to share personal information.
D)Frequent shopper programs can consist simply by a retailer offering a private-label credit card.
E)Frequent shopper programs can provide customer information automatically to the retailer when customers have their program card scanned at the time of transaction.

Question 38

Through _________,Tesco uses information collected through their frequent buyer program to target promotions and tailor assortments in its stores based on customer's preferences in the store's trading area.

A)retail analytics
B)redress analytics
C)strategic analytics
D)information drafts
E)data clones

Question 39

When a customer joins the BestBuy Reward Zone,they receive one point on every purchase they make at Best Buy stores and BestBuy.com.Reward Zone points are converted to reward certificates which can be redeemed for merchandise at Best Buy stores or on BestBuy.com.Reward Zone Members also receive exclusive members only offers throughout the year,and a "special reward" for their birthday.This describes ______.

A)special customer service
B)personalization
C)a customer loyalty program
D)an exclusive value share program
E)a sense of community

Question 40

Since Yolanda used __________ to analyze what her customers buy together during a single store visit,she knows to place facial tissues by the cold medicine and Wonder bread by the Skippy Peanut Butter.

A)market basket analysis
B)computer analysis
C)merchandising analysis
D)allotment analysis
E)location analysis

Question 41

Which of the following is TRUE regarding the customer pyramid?

A)Customers in the Iron segment in the customer pyramid need special attention from the retailer to grow their potential to be better customers.
B)All customers regardless of their segment must receive equitable promotional benefits.
C)Customers in the Lead segment may actually cost the retailer money to serve them.
D)Customers in the Gold segment are the most profitable and loyal customers.
E)Customer in the Platinum segment place little emphasis on customer service.

Question 42

Which of the following statements is TRUE?

A)Frequent shopper programs are inexpensive to implement and manage.
B)It is easy to make changes in CRM programs.
C)It is clear that CRM programs increase customer spending and loyalty.
D)It is hard to gain competitive advantage with CRM as programs can be duplicated.
E)The effects of frequent shopper programs are unlimited.

Question 43

What is customer alchemy?

A)Converting customers from iron and gold to platinum.
B)Increasing the expenses made to good customers.
C)Increasing the data collection from only platinum and gold customers.
D)Converting customers who are loyal to other retailers.
E)Listening to customers and altering loyalty programs to better satisfy their needs.

Question 44

Developing retail programs for small groups or individual customers is referred to as ___.

A)cross selling
B)community exchange of information
C)shopping programs
D)antiquated selling
E)1-to-1 retailing

Question 45

Retailers will use all BUT which of the following to retain and increase share of wallet from their best customer?

A)frequent-shopper programs
B)special customer services
C)personalization
D)community
E)lower prices

Question 46

CRM programs directed toward customers in the high-value segment ________.

A)offer more discounts
B)are an attempt to maintain loyalty
C)are treating purchases as part of the 80% of customers
D)attempt to discourage 20% of shoppers
E)encourage online shopping at no charge

Question 47

The release of the new Harry Potter book brought excitement in Enid's neighborhood.The local Books-A-Million sold thousands of vouchers for the night it was to be released.The store invited Harry Potter enthusiasts to come for a party at the store that lasted until midnight when the book would be available for purchase.Books-A-Million was developing ___________.

A)a frequent shopper program
B)a sense of community among its customers
C)1-to-1 retailing
D)tiered rewards
E)a participation program for young readers

Question 48

The ___________ is used by catalog retailers and direct markets to identify the best prospects on the basis of when was the last time the customers made a purchase,how often they make purchases and how much they spent.

A)RFM analysis
B)80-20 rule
C)customer pyramid
D)inverted pyramid
E)yeild analysis

Question 49

Which of the following does NOT describe how retailers use a customer lifetime value (CLV)?

A)CLV is used to identify and cater to the best,more profitable customers.
B)CLV should be estimated under the assumption that the customer's future purchase behaviors will be the same as they have been in the past.
C)Sophisticated statistical methods are typically used to estimate the future contributions from past purchases.
D)An RFM (recency,frequency,monetary)analysis is often used by catalog retailers and direct marketers in estimating their customers' life time value.
E)A customer who spends $800 twice a year has a higher CLV than a customer that spends $100 each month.

Question 50

Millhouse loves books and often shops at a nearby Books-A-Million.At the beginning of the year,he enrolled in a program where for $5 he would get a percentage off the purchases he made throughout the year.Which of the following best demonstrates this type of approach to customer retention?

A)community
B)sales promotion
C)frequent shopper program
D)personalization
E)special customer service

Question 51

Which of the following best describes a customer lifetime value (CLV)?

A)CLV is the value placed upon a retailer by a consumer.
B)CLV is a numerical value of how much a "best customer" shops.
C)CLV is what a customer contributes to a retailer's profits over their entire relationship with the retailer.
D)CLV is an assessment of how many valued customers shop with a retailer.
E)CLV is what retailers use to rate the value of guaranteed merchandise.

Question 52

In the customer pyramid,which of the following would be most comparable to the 20% of the 80-20 rule?

A)gold segment
B)platinum segment
C)diamond segment
D)lead segment
E)wood segment

Question 53

For what reason would the customer pyramid be more appropriate in identifying customer's life time value than utilizing the traditional 80-20 rule?

A)The 80-20 rule doesn't recognize the behavior of 20% of the customers.
B)The 80-20 rule focuses only on the value of 80% of the shoppers.
C)Customers can more easily identify themselves in where they would be located in the customer pyramid than within the 80-20 rule.
D)If shoppers have only buy 20% of the time,retailers have a missed sale 80% of the time.
E)One group would be the 20 percent of the customers with the highest CLV scores,and the other group would be the rest,which does not consider important differences amount the 80 percent of the "rest" segment.

Question 54

Depending upon the amount of money you have in Wachovia bank,you will receive a variety of different services with your accounts.The lower-tiered customers are charged $7 to use a teller,but can receive the same services for free if they use an ATM.Charging low-tiered customers for using live tellers is Wachovia's approach to ________.

A)getting the lead out
B)cutting back on customer service to save money
C)increasing their memberships
D)soliciting feedback
E)offering better services

Question 55

What does the 80-20 rule mean?

A)80% of the buying comes from 20% of the vendors.
B)80% of sales come from 20% markdowns.
C)80% of the customers pay with 20% of their income.
D)80% of the sales or profits come from 20% of the customers.
E)80% of the merchandise is sold at 20% off.

Question 56

Which of the following describes an approach that retailers use to deal with unprofitable customers?

A)Retailers charging a restocking fee for returned merchandise.
B)Retailers offering frequent buyer cards.
C)Supermarkets giving away free samples of a new product introduction.
D)Retailers having special events outside of regular store hours.
E)Retailers only allow certain merchandise to be viewed by qualified customers.

Question 57

The Bird of Paradise flower is one of the world's most stunning tropical flowers standing tall and radiant with color.When Josiah knows he's receiving flowers from Hawaii,he emails all of his customers who he knows enjoys the flower and informs them of the upcoming shipment.Josiah's program is an example of:

A)frequent shopper programs
B)special customer sales promotions
C)gaining competitive advantage
D)1-to-1 simplicity
E)1-to-1 retailing

Question 58

A way to achieve customer alchemy is through __________,which involves offering and selling more products and services to existing customers and increasing the retailer's share of wallet with these customers.

A)retail accessorizing
B)add-on selling
C)customer selling
D)cross selling
E)cross retailing

Question 59

Which of the following is NOT an approach used by retailers to retain their best customers?

A)special customer service
B)personalization
C)frequent shopper programs
D)exclusive value share
E)community

Question 60

Which of the following does NOT describe personalization implemented as a CRM program?

A)It overcomes a limitation of CRM strategies which treat all customers in a platinum segment identical.
B)With the availability of customer-level data and analysis tools,retailers can now economically offer unique benefits and target messages to individual customers.
C)The Internet channel provides an opportunity for retailers to automate personalization and efficiently develop relationships similar to those that many small local retailers have with customers.
D)It helps retailers to convert their unprofitable customers in the lead segment in the customer pyramid to best customers.
E)The effective use of customer information in personalization programs creates the positive feedback cycle in the CRM process.

Question 61

What is the third step in the CRM process?

A)analyzing data
B)developing CRM programs
C)constructing a customer database
D)identifying the target customers
E)implementing discounts

Question 62

How do retailers determine who their best customers are?

Question 63

What is market basket analysis,and when do retailers utilize it?

Question 64

At LaRue Fashions,there is a certain customer that makes large purchases every Friday and returns everything two weeks later.In response,the manager recently created a policy and published it including specifics of their terms of returned merchandise stating that all tags must be adhered,the clothing must not have been worn and must be returned within seven days to receive credit.Which of the following best describes what the retailer is doing?

A)cutting back on mail outs
B)getting the lead out
C)increasing their costs
D)soliciting feedback
E)cutting off services

Question 65

What is the primary objective of CRM process?

A)To develop a base of loyal customers who patronize the retailer frequently.
B)Being certain that the customers are satisfied with a retailer.
C)To increase the foot-traffic into the stores.
D)To offer the best prices possible to their target customer.
E)To attract customers away from the competition.

Question 66

Based upon the following customer purchase data,which customer would have a higher life-time value to the retailer?

A)Marcia
B)Jan
C)Cindy
D)Alice

Question 67

What is the 80-20 rule?

A)80% of the sales or profits come from 20% of the customers.
B)80% of the customers come from 20% of the foot traffic.
C)80% of the merchandise returns come from 20% of the customers.
D)80% of sales come from 20% markdowns.
E)80% of the sales come from 20% of the product.

Question 68

An example of CRM being used at a retailer is _______.

A)frequent buyer cards
B)having shopping carts
C)providing parking
D)offering a coat and package check
E)evidence of friendly and helpful sales associates

Question 69

What governmental agency oversees the principles for fair information practices?

A)FTC
B)FEMA
C)OSHA
D)FDA
E)FIP

Question 70

What are the inherent limitations associated with asking the customer for identifying information for building a customer database?

A)Some customers may feel that the sales associate is violating their privacy.
B)Some identifying information is illegal to use for marketing purposes.
C)If the information provided is inaccurate,the retailer may be held liable.
D)Consumers may be concerned about data mining.
E)Customers may give more information than what the sales associate can record.

Question 71

What is the second step in the CRM process?

A)analyzing data
B)developing CRM programs
C)constructing a customer database
D)identifying the target customers
E)implementing programs

Question 72

Airlines and credit cards that offer points for each dollar spent are utilizing ____.

A)a loyalty program
B)cookies
C)share of wallet
D)market baskets
E)communities

Question 73

What factors affect the degree to which consumers feel their privacy has been violated?

Question 74

Macy's has information about a customer that includes what she has purchased,the colors,sizes and styles,and how she has responded to recent promotions.This information is collectively called:

A)responsive information
B)customer information management (CIM)
C)demographics
D)preferential database
E)customer database

Question 75

What are the benefits of frequent shopper programs?

Question 76

What is customer loyalty to a retailer?

A)Customers that are committed to purchasing from the retailer and will seldom shop at the competition
B)Customers that have a high frequency of purchasing merchandise from the retailer
C)Customers that have most recently shopped and purchased from the retailer
D)Customers that have the highest amount of their purchases at one retailer would be loyal to that retailer
E)Customers that have positive emotions about a retailer would be loyal to that retailer

Question 77

What information does a customer database contain?

Question 78

Why do consumers have privacy concerns regarding cookies?

A)Hackers can use cookies to collect data about a person and get into their accounts
B)The cookies leave a trail of where the customer has been and therefore invades their privacy
C)The cookies block the ability to log on to certain sites
D)Governmental agencies may use cookies to collect extra taxes
E)The cookies may corrupt the consumers personal software files

Question 79

What segmenting scheme is frequently used with catalog retailers and direct marketers?

A)RFM analysis
B)80-20 rule
C)Customer pyramids
D)Multidimensional segmentation
E)Data mining

Question 80

What is wrong with a CRM program that encourages repeat buying by offering price discounts?

A)These CRM programs can be easily copied by competitors and they encourage customers to always be looking for the best deal rather than encouraging a relationship with one retailer.
B)These CRM programs actually cost the customer more and can damage the relationship between the retailer and the customer.
C)These CRM programs are very successful and make the retailer an unreasonable amount of profit.
D)These CRM programs encourage the customer to shop with the competitors.
E)These CRM programs are discouraged by the retailer sales associates because it causes them more labor.