Chapter 11: Customer Relationship Development and Retention Marketing
MULTIPLE CHOICE
1. Among the arguments for the importance of customer retention are:
a.
it costs at least seven times as much to acquire a new customer as it does to retain an
existing one.
b.
a satisfied customer does not talk about the firm and product.
c.
reducing customer defections will increase sales, but not necessarily profits.
2. ________ is not a way in which relationship marketing differs from transactional marketing.
a.
Networked organizations instead of hierarchical organizations
b.
Long term focus instead of short term perspective
c.
Customer dialog instead of isolated marketing research projects
3. ________ is one of the elements of the Peppers and Rogers CRM model.
a.
Analysis
b.
Differentiation
c.
Involvement
4. The CRM process:
a.
is driven by customer information.
b.
makes segmentation obsolete.
c.
is useful only for outbound marketing programs.
5. What are foundations of a CRM program?
a.
Sales force automation and customer service
b.
Marketing and promotion
c.
Customer service and email marketing
6. Analytical CRM includes:
a.
database enhancement.
b.
performance measurement.
c.
both of the above.
7. Integrating social media data into tactical CRM programs:
a.
carries inherent privacy challenges.
b.
has been fully automated.
c.
involves collecting easily quantifiable data.
8. A/An ________ profile can be developed when a person registers on or buys something from a
website.
a.
anonymous
b.
identified
c.
statistical
9. Cisco’s success in customer reactivation depended upon:
a.
collecting as much data as possible on each business person.
b.
contacting business professionals as individuals.
c.
developing registration forms.
10. The components of customer lifetime value include:
a.
all revenue after the first year.
b.
growth in amount spent with the enterprise.
c.
spending transferred from competitors.
11. The customer lifecycle allows marketers to:
a.
identify their best prospects.
b.
target lapsed customers and win back.
c.
both of the above.
12. Tesco’s Club card Program relies for its success upon:
a.
data mining and segmentation.
b.
qualitative research.
c.
social media monitoring.
13. A CRM Vision includes using ________ to create a Seamless Customer Experience.
a.
customer touchpoints and technology
b.
CRM failure rates
c.
the promise of CRM
14. Registration on a site can:
a.
furnish data for personalization of communications.
b.
provide an email address for CRM contacts.
c.
both of the above.
15. Which of the following is a true statement about the CRM process?
a.
It makes segmentation obsolete.
b.
It is driven by customer information.
c.
It is useful only for outbound marketing programs.
16. What functions do cookies perform in the targeting and personalization process?
a.
Identify the visitor’s e-mail address.
b.
Collect data about the visitor’s activities on all websites.
c.
Store data that enables the site to deliver relevant content.
17. Among the reasons for the failure of CRM programs are:
a.
lack of software applications needed to support CRM.
b.
lack of buy-in and leadership from top management.
c.
lack of understanding of the requirements of CRM.
18. ________ are a technology that broadens the ability to connect with consumers
a.
Computer clips
b.
Mobile branded apps
c.
Content management Systems
19. Seamless customer experience refers to:
a.
using the same technology in all marketing channels.
b.
equally satisfying experience at all customer touchpoints.
c.
offering different value propositions to different classes of customers.
20. Which of the following is a requirement for CRM success?
a.
Focusing on market share
b.
Lowering the cost of customer service
c.
Capturing and using customer data
21. Marketing is evolving to become more ________ vs. ________ focused.
a.
segment, acquisition
b.
product, customer
c.
retention, profitability
TRUE/FALSE
1. Enterprises need to allocate their resources to customer retention, not to customer acquisition.
2. Increasing customer retention is important in increasing enterprise profitability.
3. Customers only defect if they are not satisfied with the enterprise’s products and services.
4. The definition of a good customer is one who is profitable immediately upon acquisition.
5. Relationship marketing requires a long-term focus, while transactional marketing tends to have a
short term perspective.
6. Moving from transactional to relationship marketing requires many changes, including changing
the criteria by which success is measured.
7. The Peppers and Rogers model of CRM downplays the role of the customer database in CRM.
8. CRM is only a B2B concept because it includes sales force automation as a key component.
9. Personalization can only be done after a person has registered on a website.
10. Creating an anonymous customer profile generally requires the use of a cookie.
11. The response of an anonymous visitor to a website cannot be tracked.
12. Loyalty programs are limited in their uses to enterprises like airlines that sell high-value products.
13. CRM cannot be implemented in B2B marketing because the field sales force owns customer
relationships.
ESSAY
1. The text asserts that relationship marketing is a process not a project. Carefully explain the
meaning of this statement and identify two specific implications for the way in which marketing programs
are planned and executed.
2. There are a number of differences between the product focused approach to marketing and the
customer focused approach. Identify three areas in which there are differences between the two and be
specific about the nature of the difference. Give an example for each, indicating how marketing would be
carried out in the traditional approach versus the relational approach in each of the areas.
3. Identify the steps in the targeting and personalization process, explaining the nature of each. Give
an example of how an enterprise might carry out the process.
4. Explain how to facilitate a Seamless Customer Experience and give examples of what is required
to do so.
