Q&A Marketing consumer behaviour

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Question 1

Which of the following business settings are examples of continuous, non-contractual customer relationships? (check all that apply) Group of answer choices

Prescription Refills

Grocery Purchasing

Credit Card Usage

Charity Fund Drives

Cable TV Subscription

Insurance Policy Renewal

Doctor’s Office/Hospital Visits

Health Club Membership


Question 2

The most difficult element of the RFM model to use in targeting customers is…

Group of answer choices



Monetary Value

All of these are equally difficult


Question 3

In non-contractual settings… (check all that apply)Group of answer choices

The underlying process for monetary value appears to be firmly tied to recency and frequency

There is a highly nonlinear relationship between recency/frequency and future transactions

None of the answers are correct

Iso-value curves can be used to identify customers with different purchase histories but similar RLVs

All of the answers are correct


Question 4

In a non-contractual setting, “Gold” customers will tend to be… (check all that apply)

Group of answer choices

 Short-profitable in lifetime or long and sparse in lifetime

None of the answers are correct

Long in lifetime, but average in spend per transaction

High recency, high frequency, and high spend

Occasional buyers but huge spenders when they buy


Question 5

In a contractual setting, which of these effects tends to have the strongest effect on retention dynamics?

Acquiring the best customers

The paradox of increasing frequency

Effective targeting strategies

The sorting effect of heterogeneity

The within-customer differences over time

Question 6

Once a customer-centric firm has segmented and profiled its customers, the next step is to…

Understand their unique needs and adjust offerings accordingly

Develop the right brand positioning message

Understand their unique needs and calculate CLV

Calculate CLV and adjust marketing spending accordingly

Calculate CLV and begin migrating customers between segments


Question 7

_________ customers have low retention rates and provide economies of scale in contractual settings, and _________ customers have a long life but less monetary value per transaction in a non-contractual setting. Group of answer choices

Iron, Iron

Platinum, Iron

Iron, Platinum

Gold, Iron

Iron, Gold

Lead, Iron


Question 8

Which of the following exemplifies smart “customer alchemy”? (check all that apply)

Group of answer choices

 An airline adding a-la-carte meals for Lead customers

A wireless company offering Lead customers pre-paid plans

A rental car company offering all-inclusive packages to Iron customers

A hotel chain giving Iron customers early check-in

Question 9

Which of the following is/are true about Lead customers? (check all that apply)

Group of answer choices

 In order to maximize firm value, they should be gently removed from the customer base

If they are acquired organically, there is a chance some of them may be profitable in the future

Fixed costs should be allocated to them to ensure profitability is properly measured and to avoid a “death spiral”

All of the answers are correct

They may have indirect value to the firm

None of the answers are correct


Question 10

When applying CLV, firms should remember to… (check all that apply)

Group of answer choices

 Determine the “average customer” to help plan marketing activities

Embrace 1:1 marketing as the most profitable strategy

Reduce spending on branding efforts

Use well-defined customer tiers

All of the answers are correct

None of the answers are correct

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Q&A Marketing consumer behaviour