Question 1

The expected profit over the projected time of the relationship with a customer is called customer ________.

Accepted Answer

A) profit projection 
B) value index 
C) lifetime value 
D) lifetime profitability 
E) churn

Question 2

A coffee shop is considering a customer loyalty program.According to research by Reinhartz and Kumar, what should the owners keep in mind when setting up the program?

Accepted Answer

A) Many heavy users are multibrand loyal. 
B) Long-life customers are more costly to serve. 
C) High lifetime revenues drive duration, not profit. 
D) Long-term customers are less price sensitive. 
E) Long-life customers pay higher average prices.

Question 3

Which of the following is NOT a segment identified in Knox's Diamond of Loyalty?

Accepted Answer

A) Loyals 
B) Retainers 
C) Habituals 
D) Multibranders 
E) Switchers

Question 4

Grant and Schlesinger suggest analysing gaps between actual and potential profitability by considering:

Accepted Answer

A) current versus potential market share 
B) current purchasing behaviour of customers in each target segment 
C) impact if each consumer exhibited ideal behaviour (paid full price) 
D) the length of time customers remain with the firm 
E) all of the above

Question 5

________ ________ must address three critical questions.

Accepted Answer

A) Value creation 
B) Strategy development 
C) Multichannel integration 
D) Information management 
E) Performance assessment

Question 6

Companies often build in switching barriers such as penalty payments to encourage customers to reconsider moving to competitors.

Accepted Answer

A) True 
 B)False

Question 7

In Zeithaml, Rust and Lemon's customer pyramid, which of the following describes a platinum customer?

Accepted Answer

A) A marginally profitable user who does not warrant special treatment. 
B) A heavy user that is less price sensitive but expects the highest service levels. 
C) A user who is somewhat price sensitive and less committed. 
D) Low revenue users who nonetheless require reasonable levels of service. 
E) Users who generate the volume needed for economies of scale.

Question 8

In the ladder of loyalty, ________ have the lowest relationship commitment while ________ have the highest.

Accepted Answer

A) prospects; advocates 
B) prospects; evangelists 
C) customers; advocates 
D) clients; evangelists 
E) customers; clients

Question 9

Recent research questions the concept that long-term customers generally tend to have lower overall maintenance costs.

Accepted Answer

A) True 
 B)False

Question 10

Some customers display less loyalty to value and relationship than they do to the core service.

Accepted Answer

A) True 
 B)False

Question 11

Defensive or relationship marketing is primarily concerned with attracting and developing relationships with new customers.

Accepted Answer

A) True 
 B)False

Question 12

The CRM program's value to developing strategy is best described as:

Accepted Answer

A) a tool to drive the strategy 
B) an extension of current strategies 
C) an evaluation system 
D) a program useful for segmenting clients 
E) none of the above

Question 13

In what situations would a company consider terminating a customer? What alternatives would the company have instead of termination?

Accepted Answer

The answer of In what situations would a company consider...

Question 14

A person who continually visits a hairdresser salon because of the relationship they have built up with one particular person who works in that salon, highlights which important facet of relationships?

Accepted Answer

A) Value 
B) Customer satisfaction 
C) Length of patronage 
D) Convenience 
E) Social bonds

Question 15

In Zeithaml, Rust and Lemon's customer pyramid, which of the following describes a gold customer?

Accepted Answer

A) A marginally profitable user who does not warrant special treatment. 
B) A heavy user that is less price sensitive but expects the highest service levels. 
C) A user who is somewhat price sensitive and less committed. 
D) Low revenue users who nonetheless require reasonable levels of service. 
E) Users who generate the volume needed for economies of scale.

Question 16

Consider that you run a wine club with all ordering done online.Discuss the customer retention strategies that might be appropriate for your business.

Accepted Answer

The answer of Consider that you run a wine club...

Question 17

Companies engaging in 'offensive marketing' do all of the following EXCEPT:

Accepted Answer

A) emphasise attracting new customers 
B) use the seven Ps to attract new customers 
C) replace 'disloyal' customers who go to competitors with new customers 
D) actively nurture existing customers with the aim of retention 
E) actively encourage customers to switch from competitors

Question 18

Service firms should provide the same level of service to all customers.

Accepted Answer

A) True 
 B)False

Question 19

Customers are too important for a service firm to ever consider terminating them.

Accepted Answer

A) True 
 B)False

Question 20

Not all customer relationships are worth keeping.Which of the following is NOT a good reason to terminate the relationship?

Accepted Answer

A) The relationship is no longer profitable. 
B) The firm's strategic direction has changed. 
C) The customers' needs have changed. 
D) The customers' behaviour has changed. 
E) The production focus has changed.

Exam 13: Managing relationships and building loyalty

The expected profit over the projected time of the relationship with a customer is called customer ________.

A coffee shop is considering a customer loyalty program.According to research by Reinhartz and Kumar, what should the owners keep in mind when setting up the program?

Which of the following is NOT a segment identified in Knox's Diamond of Loyalty?

Grant and Schlesinger suggest analysing gaps between actual and potential profitability by considering:

must address three critical questions.

Companies often build in switching barriers such as penalty payments to encourage customers to reconsider moving to competitors.

In Zeithaml, Rust and Lemon's customer pyramid, which of the following describes a platinum customer?

In the ladder of loyalty, have the lowest relationship commitment while have the highest.

Recent research questions the concept that long-term customers generally tend to have lower overall maintenance costs.

Some customers display less loyalty to value and relationship than they do to the core service.

Defensive or relationship marketing is primarily concerned with attracting and developing relationships with new customers.

The CRM program's value to developing strategy is best described as:

In what situations would a company consider terminating a customer? What alternatives would the company have instead of termination?

A person who continually visits a hairdresser salon because of the relationship they have built up with one particular person who works in that salon, highlights which important facet of relationships?

In Zeithaml, Rust and Lemon's customer pyramid, which of the following describes a gold customer?

Consider that you run a wine club with all ordering done online.Discuss the customer retention strategies that might be appropriate for your business.

Companies engaging in 'offensive marketing' do all of the following EXCEPT:

Service firms should provide the same level of service to all customers.

Customers are too important for a service firm to ever consider terminating them.

Not all customer relationships are worth keeping.Which of the following is NOT a good reason to terminate the relationship?