Five Part Question: 1. Customers create long-term value because they have ______

ID: 454472 • Letter: F

Question

Five Part Question:

1. Customers create long-term value because they have __________ .

A. money

B. memories

C. needs

D. values

2. Value creators are companies whose:

A. customer value rate is below their cost of capital

B. customer value rate is above their cost of capital

C. customer value rate is equal to their cost of capital

D. customer value rate is below zero

3. Legacy metrics include all of the following EXCEPT:

A. cost of goods sold

B. number of new customers acquired

C. earnings before interest, taxes, depreciation, and amortization

D. customer’s LTV-based metric

4. All of the following are factors in defining customer equity except:

A. reducing servicing costs per customer

B. acquiring more valuable customers

C. increasing customer attrition

D. increasing profit per customer

5. What characteristic dictates most whether a company would benefit from customer analytics?

A. whether the company has a Web site

B. whether the company generates large amounts of customer-specific information

C. whether a company is customer-centric

D. the number of employees a company has

1. Answer is B.memories

Long-term value that a customer creates depends on their memories. Customers reecollect pas experiences in making a purchase decision.

2. Answer is B. customer value rate is above their cost of capital

Value creators are companies which create value to customers by providing a ROC (Return on Cpaital) which is greater than Cost of Capital.

3. Answer is D. customer’s LTV-based metric

Legacy metrics are used by organizations to quantify financial return on investment. LTV based metric is used more for analytic purposes.

4. Answer is A. reducing servicing costs per customer

Rest of the options either directly or indirectly affect customer equity

5. Answer is B. whether the company generates large amounts of customer-specific information

Analytics can be implemented considering various scenarios based on the customer specific information that a company generates.

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