Question 1

Customer relationship management programs are built on two primary metrics: lifetime value of customers and data mining.

Accepted Answer

Customer relationship management (CRM) programs are built on understanding customer needs, preferences, and behaviors, not just on the lifetime value of customers and data mining. While these two metrics can be important components of CRM, they do not encompass the entirety of what CRM programs are built on. CRM involves a wide range of activities including communication, sales, marketing, and customer service, aimed at managing and analyzing customer interactions and data throughout the customer lifecycle.

Question 2

For customers to maintain a positive attitude toward permission marketing programs, rewards must be offered continually and not just at the beginning of the program.

Accepted Answer

Rewards need to be offered continuously to keep customers engaged and interested in permission marketing programs. Offering rewards only at the beginning of the program can lead to customers losing interest over time.

Question 3

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

This is true because the goal of a loyalty or frequency program is to incentivize customers to continue purchasing the product or using the service. By adding value, such as exclusive discounts or rewards, the customer is more likely to choose the product over competitors and become a loyal customer.

Question 4

When customers in a permission marketing program receive rewards during the program in addition to at the beginning, it creates a feeling of empowerment.

Accepted Answer

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Question 5

Heavy users of a good or service are the best segment to target with a frequency program.

Accepted Answer

The answer of Heavy users of a good or service...

Question 6

In general, customer relationship management programs should be designed to enhance customer loyalty.

Accepted Answer

Customer relationship management programs are focused on improving the relationship between the company and its customers, with the ultimate goal of building customer loyalty. By providing personalized customer experiences and addressing their needs and concerns, these programs help to create a strong bond between customers and the brand, which can improve customer retention and increase the chances of repeat business. Therefore, customer relationship management programs should be designed with the objective of enhancing customer loyalty.

Question 7

Describe a permission marketing program.

Accepted Answer

The answer of Describe a permission marketing program....

Question 8

When 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 rewards based on an unpredictable number of desired behaviors, which increases motivation and engagement in the program. In contrast, a regular reward schedule may lead to a decrease in motivation once participants become accustomed to the routine of receiving rewards.

Question 9

The basic idea behind customer relationship management 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 is true. The concept of customer relationship management (CRM) is based on using data about customers to improve relationships, tailor products and communications, and ultimately increase sales and profits. This is done through various strategies such as targeted marketing, personalized messaging, and targeted offers based on customer behavior and preferences.

Question 10

In purchasing a direct mailing list, a response list consists of individuals who have:
A)met a specific demographic profile.
B)responded to previous direct mail offers made by the company purchasing the list.
C)made purchases or responded to direct mail offers in the past.
D)responded to a direct mail offer within the last 30 days.

Accepted Answer

A response list is specifically compiled from individuals who have previously made purchases or responded to direct mail offers, indicating a higher likelihood of future engagement.

Question 11

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 are designed to reward customers for making multiple purchases or spending more money on luxury goods. Therefore, consumers are often more motivated to make these purchases in order to earn rewards, rather than focusing on buying necessities.

Question 12

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 program.

Accepted Answer

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

Question 13

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 lifetime value of a customer is based on the total revenue a business can expect from a customer over the entire duration of their relationship, not necessarily that spending increases over time.

Question 14

The value of the reward in a frequency program has no relationship on the effort individuals will expend to obtain the reward.

Accepted Answer

Studies have shown that the level of reward does have an impact on the effort individuals will expend to obtain it. Higher valued rewards tend to motivate individuals to work harder to achieve them.

Question 15

In a customer relationship management (CRM)program, the share of a customer refers to a customer's potential value.

Accepted Answer

The share of a customer in a CRM program refers to the potential value that a customer can contribute to the organization over their lifetime as a customer. This includes factors such as the customer's purchasing history, likelihood of making future purchases, and potential for referrals or word-of-mouth marketing.

Question 16

Describe a customer relationship management (CRM)program.

Accepted Answer

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Question 17

According to the Direct Marketing Association, about 60 percent of a typical direct marketing budget targets:
A)former customers who have not purchased recently.
B)prospecting for new customers.
C)retaining current customers.
D)individuals from an internal customer list.

Accepted Answer

According to the Direct Marketing Association, about 60% of a typical direct marketing budget targets prospecting for new customers. This means that the majority of the budget is focused on acquiring new customers rather than retaining current ones or targeting former customers who have not made a recent purchase. While internal customer lists may be used for prospecting, the primary focus is on finding new customers.

Question 18

Companies develop frequency programs to encourage customer loyalty and to generate sales.

Accepted Answer

The answer of Companies develop frequency programs to encourage customer...

Question 19

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

Accepted Answer

A frequency program is designed to encourage repeat purchases by offering incentives, rewards or discounts to customers.

Question 20

Describe a frequency program.

Accepted Answer

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Quiz 11: Database and Direct Response Marketing and Personal Selling