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CCXP: By Competencies > 3b. Multiple Choice for Metrics & Analytics > Flashcards

3b. Multiple Choice for Metrics & Analytics Flashcards

1
Q

Question #1: An employee tells you in a presentation that your customer base typically buys 40% of your offerings. This metric is called:

  • Share of wallet
  • Return on investment
  • Attrition
  • Product penetration
A

Correct Answer:
Product penetration

Explanation: Product penetration is the percentage of your product line (offerings) that a customer is buying. Share of wallet is the percentage of the customers’ total spending that he/she is spending with your company. Return on investment is the percentage of increased value gained by investing in something. Attrition is the percentage of turnover or churn or non-renewals or lost customers.

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2
Q

Question #2: What is the Net Promoter Score when 30% of survey respondents are promoters, 40% are passive, and 30% are detractors?

  • 70%
  • 10%
  • 0%
  • -10%
A

Correct Answer:
0%

Explanation: 30% promoters minus 30% detractors = 0%

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3
Q

Question #3: A new technology will cost $500,000 and it is expected to increase sales by $750,000. What is the ROI?

  • None of the above
  • 150%
  • 50%
  • 75%
A

Correct Answer:
50%

Explanation: ROI = [(gain from investment - cost of investment) / cost of investment] = [(750,000 - 500,000) / 500,000] = 250,000 / 500,000 = 50%

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4
Q

Question #4: A double-barreled question makes [xxxxx] weak.

  • Vaildity
  • Reliability
  • Confidence
  • Standard deviation
A

Correct Answer:
Vaildity

Explanation: Validity is lost when your data does not measure what it is meant to measure. A double-barreled question has two elements, so you do not know which element the customer is rating.

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5
Q

Question #5: Top box scores are useful in customer experience management to:

  • Show managers how many customers selected the highest rating
  • Identify the value of resolving customers’ chronic issues
  • Quantify customer churn and customer lifetime value
  • Refine Net Promoter Scores
A

Correct Answer:
Show managers how many customers selected the highest rating

Explanation: . Top box = the highest point on a survey rating scale. Top 2 boxes = the 2 highest points, e.g. 9 and 10 for a 10-point – or 4 and 5 for 5-point scales. Bottom box is the opposite: the lowest point. (Detractors represent a bottom-7-box summary, and Promoters represent a top-2-box summary.)

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6
Q

Question #6: [xxxxx] data shows what happened and [xxxxx] data shows why.

  • Operational, customer
  • Quantitative, descriptive
  • Descriptive, quantitative
  • Customer, operational
A

Correct Answer:
Operational, customer

Explanation: Operational data shows what happened. Ask customers to find out why.

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7
Q

Question #7: Which customer experience metric will influence managers the most?

  • Trends of key drivers of loyalty and comparisons across business units
  • Revenue at-risk or at-opportunity related to groups of customers dissatisfied or satisfied with a key driver of loyalty
  • Net Promoter Score and revenue growth rate comparisons to others in the same industry
  • Survey ratings and Net Promoter Score
A

Correct Answer:
Revenue at-risk or at-opportunity related to groups of customers dissatisfied or satisfied with a key driver of loyalty

Explanation: Showing customer experience data within the context of company financial data is compelling to managers and helps them see why and how they can make a difference. (it hints about probability of managers’ future success; everyone wants more budget)

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8
Q

Question #8: A comprehensive customer experience dashboard contains:

  • Summarized customer ratings of critical moments of truth
  • Summarized customer behavior data, such as penetration, lifetime value, engagement, share of budget
  • Progress metrics of action plans tied to customer behavior and ratings improvement initiatives
  • All of the above
A

Correct Answer:
All of the above

Explanation: Ideally all of these are included in one dashboard. Connect the dots, with high visibility, between what employees do, what customers think, what customers do, and how much the company is growing.

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9
Q

Question #9: Which of the following metrics is about customer perceptions?

  • Sentiment
  • Churn
  • Response rate
  • Engagement
A

Correct Answer:
Sentiment

Explanation: Sentiment is about positive and negative feelings. Engagement is about interaction. Churn is about turnover or loss (stop buying). Response rate is about survey participation.

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10
Q

Question #10: When your CEO asks you to show how customer perception data is related to revenue, you should:

  • Compare ratings trends to share of budget (i.e. wallet) trends
  • All these answers are effective links between perceptions and revenue
  • Look for patterns among key driver ratings, relationship length, purchase trends, and your company’s operational performance among all customers or groups of customers
  • Compare ratings and purchase volume of individual responses last year versus this year
A

Correct Answer:
All these answers are effective links between perceptions and revenue

Explanation: Finding patterns in VoC combined with operational and financial data will be more convincing to executives than VoC alone.

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11
Q

Question #11: Which one of these does NOT affect validity?

  • Mixed interpretations of scales
  • Mixed interpretations of phrases
  • Low sample size
  • Double-barreled questions
A

Correct Answer:
Low sample size

Explanation: Low sample size affects statistical significance, or confidence. The other 3 choices affect validity.

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12
Q

Question #12: After you call Customer Service for something you bought, you are asked how difficult it was to get the help you needed. This is an example of:

  • NPS
  • Customer Health Score
  • Customer Effort Score
  • CSAT
A

Correct Answer:
Customer Effort Score

Explanation: Customer Effort Score asks: “The company made it easy for me to handle my issue: Strongly Agree, Agree, Slightly Agree, Slightly Disagree, Disagree, Strongly Disagree.

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13
Q

Question #13: Statistical significance is also known as confidence because:

  • You must avoid double-barreled questions
  • Your scales and words must be interpreted the same way by all participants
  • Your findings must be stable for this time period
  • Your sample must accurately reflect the population
A

Correct Answer:
Your sample must accurately reflect the population

Explanation: Confidence = Statistical Significance = p-value = your sample reflects the population.

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14
Q

Question #14: What is the retention rate? 1000 customers January 1st, 1200 customers March 31st, 300 customers acquired.

  • 10%
  • 90%
  • 30%
  • 70%
A

Correct Answer:
90%

Explanation: Customer Retention = (customers at the end of the time period minus customers acquired) divided by customers at the beginning of the period. (1200 - 300) / 1000 = 900 / 1000 = 90%.

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15
Q

Question #15: Text mining, voice mining, and video mining are possible via this technology:

  • Natural language programming (NLP)
  • Customer Lifecycle Management (CLM)
  • Net Promoter System (NPS)
  • Enterprise feedback management (EFM)
A

Correct Answer:
Natural language programming (NLP)

Explanation: NLP allows computers to understand human language (text, audio, vide).

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16
Q

Question #16: 1 minus the margin of error is:

  • Repeatability
  • Confidence interval
  • Confidence, or statistical significance
  • Validity
A

Correct Answer:
Confidence interval

Explanation: Confidence interval = 1 minus the margin of error, or the percentage likelihood that a data point is accurate, or the number of times the data point would be true if you repeat your study 100 times.

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17
Q

Question #17: “42% of customers likely to rebuy” is an example of:

  • Perception data
  • Descriptive data
  • Operational data
  • Outcome data
A

Correct Answer:
Outcome data

Explanation: Outcome data is what customers do, or plan to do (buy, rebuy, recommend, etc.), as a result of their perceptions.

18
Q

Question #18: Prescriptive analytics informs you:

  • What will happen
  • What happened
  • How to make it happen
  • Why did it happen
A

Correct Answer:
How to make it happen

Explanation: Prescriptive analytics tells you how to make it happen. This is like a doctor’s prescription, telling you how to solve your challenge.

19
Q

Question #19: Which of the following statements is true?

  • Operational goals based on customer perceptions are more actionable than perception goals or financial goals
  • Customer perception goals are the best way to drive long-term improvements
  • Revenue growth goals typically improve customer loyalty
  • Goals based on efficiency, such as average hold time, will drive profitability
A

Correct Answer:
Operational goals based on customer perceptions are more actionable than perception goals or financial goals

Explanation: Operational goals are about daily work. Employees can control (act on) their daily work to a much higher degree than they can control perceptions or financial performance. Efficiency may save money in the short-term yet cost more in the long-term if relationships aren’t strengthened or real needs are short-circuited. Revenue goals may drive selfish behaviors that customers sense are not in their best interest. Perceptions should be translated into operational root causes to drive change/growth.

20
Q

Question #20: The amount a customer segment spends on your brand, relative to what they spend on all brands total for your type of product is:

  • Customer lifetime value
  • Share of market
  • Product penetration
  • Share of wallet
A

Correct Answer:
Share of wallet

Explanation: Share of wallet = share of budget = their spend with your brand divided by their spend on all brands for your product category.

21
Q

Question #21: Strong positive correlation means all of the following EXCEPT:

  • Customers who rated the loyalty index as mediocre also rated a CX factor as mediocre
  • Customers who rated the loyalty index low also rated a CX factor low
  • Customers who rated the loyalty index high also rated a CX factor high
  • Customers who rated the loyalty index high gave a low rating to a CX factor
A

Correct Answer:
Customers who rated the loyalty index high gave a low rating to a CX factor

Explanation: Correlation means there is correspondence between the ratings of a CX factor and a loyalty index. Customers who rated high for one is also rated high for the other, medium for both, or low for both.

22
Q

Question #22: Cumulative profitability of customers is:

  • CAGR: cumulative average growth rate
  • EPS: earnings per share
  • LTV: lifetime value
  • ROA: return on assets
A

Correct Answer:
LTV: lifetime value

Explanation: Lifetime value is the sum of revenue minus costs for a customer or segment across the duration of their relationship with your brand. LTV = CLV.

23
Q

Question #23: Dispersion of data, or distance from the average value is known as:

  • Correlation coefficient
  • Confidence interval
  • Median
  • Standard deviation
A

Correct Answer:
Standard deviation

Explanation: Standard deviation indicates how spread out your data is compared to the average or mean. If your study’s data points are spread out for a certain thing, then the average doesn’t mean much to managers. If your study’s data points for a certain thing are similar, then the average is more trustworthy. The standard deviation is the amount of dispersion or variation of a set of values, or how spread out the data set is.

24
Q

Question #24: Which of the following statements is NOT true for key driver analysis?

  • It connects customer experience aspects to financials
  • It identifies quick wins
  • It prioritizes what to work on, for highest ROI
  • It shows the relationship between customer experience factors and loyalty
A

Correct Answer:
It identifies quick wins

Explanation: Key drivers are major contributors to customers’ behaviors, and accordingly, to financial growth. Key driver analysis (KDA) is also known as correlation analysis. It correlates each factor contributing to customer experience versus the loyalty index. CX indexes are connected to financials (likely to rebuy, likely to recommend, overall satisfaction, customer health, customer effort, etc.). Quick wins may have nothing to do with key drivers. Quick wins are typically among the “useful many” in a Pareto analysis, instead of the “vital few”.

25
Q

Question #25: Which of these statements does NOT describe a leading indicator?

  • It’s a faulty filter within a process workflow that is causing poor performance to be experienced by customers
  • It’s the root cause of a “vital few” contributor to a key driver of loyalty
  • Market share, churn, abandoned shopping carts,
  • It’s what you’re seeing that customers will soon experience
A

Correct Answer:
Market share, churn, abandoned shopping carts

Explanation: Market share, churn, and shopping carts are visible to you only after customers have behaved a certain way. Since none of these precede customer behavior, they are lagging indicators, not leading indicators.

26
Q

Question #26: It’s most helpful to managers to benchmark:

  • Geography vs. geography
  • Realities vs. expectations
  • Product vs. product
  • Company vs. industry
A

Correct Answer:
Realities vs. expectations

Explanation: CX = customers’ realities versus their expectations. All of the other comparisons listed here are often misleading because they have different maturity curves, market forces, and cultures.

27
Q

Question #27: The best way to identify importance or prioritization is:

  • Quick wins
  • Correlation coefficient
  • Stated importance
  • Regression analysis
A

Correct Answer:
Correlation coefficient

Explanation: Correlation coefficients show the degree of alignment between customers’ ratings for separate CX factors versus loyalty. It’s most important to work on what’s tied closely to loyalty.

28
Q

Question #28: Which of the following is NOT a reason why stated importance is not appropriate in your surveys?

  • Customer behavior often differs from what they say
  • It’s unnecessary since correlation analysis indicates implied importance
  • You should only ask questions that you have validated as being important to your customer
  • It’s important to compare satisfaction versus importance
A

Correct Answer:
It’s important to compare satisfaction versus importance

Explanation: It is inappropriate to ask a stated importance question for the 3 reasons shown. “Satisfaction versus Importance” is a different matter. Importance is a prioritization ranking (ordinal data), whereas satisfaction is a performance rating (nominal data). It is not advisable to compare nominal versus ordinal data.

29
Q

Question #29: Which of these statements about leading indicators is NOT true?

  • An early warning signal is a root cause in a process workflow: THE LEADING INDICATOR
  • Customers’ ratings/statements about their likelihood to do something is a leading indicator
  • CXM facilitation means the CX team is facilitating timely, actionable data and engagement and follow-through
  • Organizational and employee engagement mean people are paying attention to leading indicators
A

Correct Answer:
Customers’ ratings/statements about their likelihood to do something is a leading indicator

Explanation: Customers’ future behavior is only known to you after it happens. Therefore, it is a lagging indicator. “The train is in the station” before the outputs of your process workflows are experienced by customers. Leading indicators are only what you can see before your customers experience it.

30
Q

Question #30: Cycle time for a process was reduced from 10 days to 2 days after your organization prevented the root cause of a major customer issue. What is the ROI?

  • 500%
  • 80%
  • 25%
  • 20%
A

Correct Answer:
80%

Explanation: ROI for time saved = (new time minus old time) divided by old time. The negative result represents time reduced. (2 -10) / 10 = -8/10 = -80% or 80% ROI.

31
Q

Question #31: What is NOT a reason why Pareto analysis is useful in CX?

  • It identifies the vital few issues for resolving customer pain
  • It reveals the top factors causing 80% of the customers’ issue
  • It prioritizes what will generate highest ROI for key drivers of loyalty
  • It encourages quick wins instead of permanent solutions
A

Correct Answer:
It encourages quick wins instead of permanent solutions

Explanation: Pareto analysis rank-orders the sub-factors of a key driver of loyalty, so you can identify the vital few issues whose cumulative percentage of occurrence is 80%. After you solve these vital few issues, the problem that bothered customers is virtually nonexistent.

32
Q

Question #32: Your intern drafts a survey report stating that loyalty is caused by the key drivers. This is wrong for all these reasons EXCEPT:

  • Correlation is not causation
  • Nobody knows 100% of the contributors to loyalty
  • Loyalty is related to the key drivers
  • It’s unethical to say a key driver causes loyalty
A

Correct Answer:
Loyalty is related to the key drivers

Explanation: Loyalty is truly RELATED to the key drivers. The other 3 choices are reasons why you should not say loyalty is CAUSED by a key driver.

33
Q

Question #33: To understand reasons behind low ratings for a key driver of loyalty you could:

  • Analyze customer behavior data from channel partners, sales, service, and operations
  • Use text mining or voice mining software to analyze customer comments from surveys, complaints, and contact center logs
  • Interview customer-facing employees to learn what they’ve observed
  • All these answers are great ways to learn about low ratings
A

Correct Answer:
All these answers are great ways to learn about low ratings

Explanation: Experiment with a variety of ways to gain deeper understanding, and you’ll uncover many ways to enrich VoC data and compel managers to improve CX.

34
Q

Question #34: When a manager asks you what the mode is for a survey question, they want to know:

  • What is the midpoint among ratings for that question
  • What is the standard deviation for that question
  • What is the most common rating for that question
  • What is the average rating for that question
A

Correct Answer:
What is the most common rating for that question

Explanation: The mode is the most frequently occurring rating for a question.

35
Q

Question #35: CX Annuities are powerful for all these reasons EXCEPT:

  • It elevates CX ROI from quick wins toward preventing issue recurrence, and even issue occurrence
  • It focuses CX attention on changing customers instead of aligning to customers
  • It focuses managers company-wide toward a 1-to-1 ratio between customers’ realities vs. expectations
  • It frees-up value-rescuing resources toward value-creating opportunities
A

Correct Answer:
It focuses CX attention on changing customers instead of aligning to customers

Explanation: CX annuities is central to Experience Leadership: company-wide alignment to customer expectations, to prevent issues, and thereby generate highest CX ROI.

36
Q

Question #36: A CX leading indicator is identified through:

  • Any customer measurement, such as NPS, FCR, CES, defect rate, churn rate, repurchase rate, etc.
  • Key driver analysis
  • Pareto analysis
  • 5 why’s analysis
A

Correct Answer:
5 why’s analysis

Explanation: 5 why’s reveals the ultimate actionable cause of customers’ financial behaviors with your brand: process problem, input problem, and/or engagement problem.

37
Q

Question #37: Which statement is NOT true?

  • Operational data is supplied by engagement data, cookies, UPC barcodes, and CRM data
  • Operational data tells you what happened
  • Customer data is supplied by journey mapping, empathy mapping, and service blueprints
  • Customer data tells you how customers reacted
A

Correct Answer:
Customer data is supplied by journey mapping, empathy mapping, and service blueprints

Explanation: Customer data is supplied by them: perceptions, satisfaction, intentions, preferences, etc.

38
Q

Question #38: Outcome data is often defined erroneously as a leading indicator. The problem with this is:

  • Outcome data = results of your CX programs
  • Leading indicators are what you can do to affect what customers experience – not what customers plan to do
  • Outcome data = what customers did or what they plan to do as a result of their perceptions
  • Leading indicators are customer behaviors we can expect in the near future
A

Correct Answer:
Leading indicators are what you can do to affect what customers experience – not what customers plan to do

Explanation: Outcome data is what customers did or plan to do, and leading indicators are what you can do to affect what customers experience. The latter is the reason why outcome data is not a leading indicator. The other 2 statements are not true. Note: However, the CXPA volunteers who helped create the CCXP exam questions think outcome data is a leading indicator.)

39
Q

Question #39: Last quarter, your brand acquired 200 new customers. At the end of the preceding quarter, there was a celebration when your 5000th customer was added. Today you found out 50 customers switched to a different supplier during this past quarter. What is your retention rate?

  • 99%
  • 1%
  • 25%
  • 75%
A

Correct Answer:
99%

Explanation: [{(5200 minus 50) minus 200} divided by 5000] x 100 = [4950-200]/5000 = 99%. The addition of 200 customers is extraneous. Retention rate only asks for how many of last quarter’s customers are still buying from you. 50 out of 5000 customers from last quarter stopped, but 4950 out of 5000 customers were retained.

40
Q

Question #40: Which statement below should you emphasize in your conversations with executives and investors?

  • Sales velocity tells them how quickly customers are adding money to your firm’s bank account
  • Profit margin expansion tells them how much more revenue is being passed on to investors
  • CX efforts proven to increase sales velocity and/or profit margin expansion tells them your value to the firm
  • NPS tells them how many customers might recommend your brand
A

Correct Answer:
CX efforts proven to increase sales velocity and/or profit margin expansion tells them your value to the firm

Explanation: When your CX efforts lead customers to increase their trust in your brand, such that they buy more rapidly (shorter sales cycle) and more readily (without discounts, more premium offerings, lower cost to serve), then it means everyone wins. This is ideal for CX team longevity and continuation of your customer-centricity efforts toward almost-automatic CX excellence.

CCXP: By Competencies (14 decks)

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