Question 1

In permission marketing, permission is normally obtained from individuals in exchange for an incentive.

Accepted Answer

Permission marketing is the practice of soliciting permission from potential customers to receive further communications from a company. This permission is typically obtained in exchange for an incentive, such as exclusive content, discounts, or early access to products.

Question 2

To maintain positive attitudes toward permission marketing programs, rewards must be offered continually and not just at the beginning of the program.

Accepted Answer

Offering rewards continuously throughout the program helps keep customers engaged and interested, which in turn helps maintain positive attitudes toward the program. If rewards were only offered at the beginning, customers may lose interest over time and become less receptive to the program.

Question 3

A frequency program provides incentives that are designed to encourage customers to make repeat purchases.

Accepted Answer

A frequency program is designed to reward customers for making repeat purchases, which encourages them to continue doing business with the company. Examples of incentives include points programs, discounts on future purchases, and exclusive access to sales or events.

Question 4

A program designed to build long term loyalty and bonds with customers through the use of a personal touch facilitated by technology is a customer relationship management (CRM) program.

Accepted Answer

A CRM program is indeed designed to build and maintain long term relationships with customers by providing personalized interactions and experiences through the use of technology.

Question 5

An important key to success in permission marketing programs is to make sure participants have actually agreed to participate and not been tricked into participating or signed up without their knowledge.

Accepted Answer

This is true because permission marketing relies on obtaining explicit and informed consent from participants, rather than spamming or tricking them into receiving marketing messages. Without genuine agreement, participants are likely to be annoyed or even angry, leading to a lack of trust and loyalty for the brand.

Question 6

Moderate users of a good or service are most likely to be enticed by a frequency program.

Accepted Answer

Moderate users of a good or service are more likely to be enticed by a frequency program as it rewards them for their continued loyalty without requiring them to spend a significant amount of money to reach a high tier of rewards. Heavy users may already reach those high tiers naturally and may not be as responsive to a frequency program.

Question 7

With a frequency program, consumers are more likely to put forth greater effort to obtain luxury goods as opposed to necessity items.

Accepted Answer

Frequency programs often offer rewards or benefits for repeated purchases of luxury items, which can incentivize consumers to put forth more effort to obtain those items. Necessity items, on the other hand, are often purchased out of need rather than desire, and may not elicit the same level of effort or loyalty from consumers.

Question 8

When analyzing the reasons for the failures of CRM programs, the overarching theme was that the CRM programs were focused on sales rather than enhancing relationships with customers.

Accepted Answer

The statement correctly summarizes the main reason for the failures of CRM programs.

Question 9

The greater the value of the reward in a frequency program, the more effort individuals will expend in the program to obtain the reward.

Accepted Answer

This statement is true according to the theory of operant conditioning. It states that individuals are more likely to repeat behavior that is positively reinforced, which includes rewards in frequency programs. Therefore, a higher value reward will likely motivate individuals to put in more effort to obtain it.

Question 10

The lifetime value of a customer is based on the idea that the amount of money customers spend with a firm increases over time.

Accepted Answer

The answer of The lifetime value of a customer is...

Question 11

To optimize permission marketing, firms must feature empowerment and reciprocity.

Accepted Answer

Empowerment and reciprocity are key factors in permission marketing, as they help to increase engagement and build trust between the consumer and the brand. Empowerment involves offering the consumer choices and control over their interactions with the brand, while reciprocity involves providing something of value in exchange for the consumer's permission to engage with the brand. By incorporating these elements into their permission marketing strategies, firms can better connect with consumers and foster longer-term relationships.

Question 12

The basic idea behind customer relationship management (CRM) is that companies can use databases to customize products and communications to customers that would result in higher sales and profits.

Accepted Answer

This statement accurately describes the basic concept of customer relationship management (CRM) which is to use customer data to tailor products and communications to increase sales and profits.

Question 13

Companies develop frequency programs to encourage customer loyalty and to match or preempt the competition.

Accepted Answer

Frequency programs, such as loyalty programs, are developed by companies to incentivize customers to continue doing business with them and to stay ahead of competitors who may also offer similar programs.

Question 14

The number one reason individuals remain loyal to a permission marketing program after they have joined is a chance to win prizes in a contest or sweepstakes.

Accepted Answer

According to research and surveys, the number one reason for individuals to remain loyal to a permission marketing program after joining is receiving personalized, relevant content and offers. While contests and sweepstakes can be a motivating factor, it is not the primary reason for loyalty.

Question 15

A key principle in developing a loyalty or frequency program is to design the program to enhance the value of what the product offers to customers.

Accepted Answer

By designing the loyalty or frequency program to enhance the value of what the product offers to customers, it incentivizes customers to continue buying from the company, leading to increased customer loyalty and repeat business.

Question 16

Share of a customer measures a customer's potential value.

Accepted Answer

Share of a customer reflects the customer's potential value in terms of their likelihood to make future purchases and their overall lifetime value to the company.

Question 17

For long-term success in permission marketing programs, customers should feel empowered, which means they have the power to choose the incentive they want to join the permission program.

Accepted Answer

The answer of For long-term success in permission marketing programs,...

Question 18

In providing rewards for a frequency program, a variable ratio reward schedule is superior to regularly scheduled rewards.

Accepted Answer

A variable ratio reward schedule provides a reward after a random number of desired behaviors, which keeps the recipient motivated and engaged in the program. Regularly scheduled rewards can become expected and therefore lose their effectiveness over time.

Question 19

When customers in a permission marketing program receive rewards during the program as well as at the beginning, it creates a feeling of reciprocity.

Accepted Answer

Giving rewards throughout a permission marketing program creates a sense of reciprocity where customers feel like they owe the business something in return for the rewards they have received. This can encourage them to continue engaging with the program and make future purchases.

Question 20

CRM is built on two primary metrics: lifetime value of customers and data mining.

Accepted Answer

CRM (Customer Relationship Management) is built on managing customer relationships and interactions, often using data analysis, but it is not solely based on lifetime value and data mining.

Quiz 11: Database and Direct Response Marketing and Personal Selling