Chapter 5 - CRM, Big Data, and Marketing Analytics

Question 1

Customer Relationship Management

Answer 1

A comprehensive business model for increasing revenues and profits by focusing on customers.

Question 2

3 CRM Major Objectives

Answer 2

1) Customer acquisition—acquiring the right customers based on known or learned characteristics that will drive growth and increase margins.
2) Customer retention—retention of satisfied and loyal profitable customers and channels, and thus growing the business profitably over the long run.
3) Customer profitability—increased individual customer margins while offering the right products at the right time.

Question 3

Customer Satisfaction

Answer 3

The level of liking an individual harbours for an offering—that is, to what level is the offering meeting or exceeding the customer’s expectations?

Question 4

Customer Loyalty

Answer 4

the degree to which an individual will resist switching or defecting from one offering to another.

Question 5

customer lifetime value (CLV)

Answer 5

an important metric in CRM that demonstrates that successful long-term relationships with customers pay handsomely in terms of cost savings, revenue growth, profits, referrals, and other important business success factors.

Question 6

Return on Customer Investment (ROCI)

Answer 6

A calculation that estimates the projected financial returns from a customer. It is a useful strategic tool for deciding which customers deserve what levels of investment of various resources.

Question 7

Firing a customer

Answer 7

The shifting of investment of resources from a less attractive customer to more profitable ones.

Question 8

Customer Touchpoints

Answer 8

Where the selling firm touches the customer in some way, thus allowing for information about him or her to be collected.

Question 9

Data warehouse

Answer 9

a compilation of customer data generated through touchpoints that can be transformed into useful information for marketing management decision making and marketing planning

Question 10

Data mining

Answer 10

a sophisticated analytical approach to using the massive amounts of data accumulated through a firm’s CRM system to develop segments and microsegments of customers for purposes of either market research or development of market segmentation strategies

Question 11

Database marketing

Answer 11

Direct marketing involving the utilization of the data generated through CRM practices to create lists of customer prospects who are then contacted individually by various means of marketing communication.

Question 12

Organizational Learning

Answer 12

The analysis and refinement phase of the CRM process that is based on customer response to the firm’s implementation strategies and programs.

Question 13

formalization

Answer 13

The formal establishment of a firm’s structure, processes and tools, and managerial knowledge and commitment to support its culture.

Question 14

Customer Mind-Set

Answer 14

An individual’s belief that understanding and satisfying customers, whether internal or external to the organization, is central to the proper execution of his or her job.

Question 15

Big Data

Answer 15

the ever-increasing quantity and complexity of data that is continuously being produced by various technological sources

Question 16

Structured Data

Answer 16

data that is generated in such a way that a logical organization is imposed on it during its generation, this enabling it to be more readily analyzable for knowledge creation

Question 17

Unstructured Data

Answer 17

data that is generated in such a way that a logical organization is imposed on it during its generation, this enabling it to be more readily analyzable for knowledge creation

Question 18

Semi-Structured Data

Answer 18

data that contains some elements of structure that makes it easier for machines to understand its organization, but still contains parts that do not possess an appropriate level of structure to make them readily analyzable by automated means for knowledge creation

Question 19

Marketing Analytics

Answer 19

a set of methods facilitated by technology that utilize individual-level and market-level data to identify and communicate meaningful patterns within the data for the purpose of improving marketing-related decisions

Question 20

Marketing Analyst

Answer 20

an individual familiar with different forms of market and customer data and who is trained to conduct different market analyses, as well as the computational costs associated with those analyses

Question 21

Descriptive Analytics

Answer 21

an approach that utilizes data to provide summary insights

Question 22

Diagnostic Analytics

Answer 22

an approach that utilizes data to explore the relationship between different marketing-relevant factors that influence the organization’s performance either directly or indirectly

Question 23

Prescriptive analysis

Answer 23

an approach that involves determining the optimal level of marketing-relevant factors for a specific context by considering how adjusting their levels in varying ways will impact different marketing outcomes

Question 24

Predictive analytics

Answer 24

an approach that utilizes data to make predictions about future marketing outcomes of interest

Question 25

Sentiment analysis

Answer 25

a type of analytic method that identifies the general attitude (e.x. positive, negative, or neutral) contained within a message through an analysis of its content

Question 26

attribution

Answer 26

a type of analytic method that identifies the general attitude (e.x. positive, negative, or neutral) contained within a message through an analysis of its content

Question 27

content filtering

Answer 27

an analytical method that identifies which products or services to recommend based on a determination of how similar a product or service seems to be to those that the customer has demonstrated a preference for in the past, or is currently considering

Question 28

Collaborative filtering

Answer 28

an analytic method that predicts a customer's preferences for products or services based on the observed preferences if customers who are perceived to be similar

Question 29

Marketing Dashboard

Answer 29

A comprehensive system of metrics and information uniquely relevant to the role of the marketing manager in a particular organization. Dashboards provide managers with up-to-the-minute information necessary to run their operation.

Question 30

Return on Marketing Investment (ROCI)

Answer 30

What impact an investment in marketing has on a firm's success, especially financially.

Question 31

4 elements of the CRM process cycle

Answer 31

1) Knowledge discovery 2) Marketing planning 3) Customer Interaction 4) Analysis and refinement

Question 32

To maximize a firms ability to successfully use touchpoints

Answer 32

1. identify all potential touchpoints 2. develop specific objectives for what kind of information can be collected at each touchpoint 3. determine how that information will be collected and ultimately integrated into the firm's overall customer database 4. develop policies on how the information will be accessed and used.

Question 33

At the strategic marketing level, a customer-centric culture includes, but is not limited to, the following major components

Answer 33

1. adopting a relationship or partnership business model overall, with mutually shared rewards and risk management 2. Redefining the selling role within the firm to focus on customer business consultation and solutions 3. increasing formalization of customer analysis processes 4. taking a proactive leadership role in educating customers about value chain opportunities available by developing a business relationship 5. focusing on continuous improvement principles stressing customer satisfaction and loyalty

Question 34

4 V's of Big Data

Answer 34

1. volume: the amount of data produced 2. velocity: the frequency at which data is generated over time and the speed at which it can and should be analyzed and used 3. variety: the different types of data including text, video, images, and audio 4. veracity: the reliability and validity of the data

Question 35

6 Big Data sources

Answer 35

1. business systems 2. social media platforms 3. internet-connected devices 4. mobile apps 5. commercial entities 6. government entities

Question 36

4 key types of marketing analytics

Answer 36

1. descriptive analytics 2. diagnostic analytics 3. predictive analytics 4. prescriptive analytics

Question 37

Key benefits of a marketing dashboard approach

Answer 37

1. aligns marketing objectives, financial objectives, and firm strategy based on the selected dashboard metrics 2. enhances alignment within the marketing function and also clarifies marketing's relationships with other organizational functions. Cross-functional alignment contributes greatly to a shared spirit for organizational success 3. portrays data in a user-friendly manner. Creates a direct, understandable link between marketing initiatives and financial results 4. fosters a learning organization that values fact-based, logical decision making about allocation of marketing resources to achieve desired organizational results 5. create organizational transparency about marketing's goals, operations, and performance, increasing marketing's credibility and trust by organizational leadership and other areas of the firm

Question 38

two primary goals of any dashboard

Answer 38

diagnostic insight | predictive foresight

Question 39

Key elements of a great marketing dashboard

Answer 39

1. company goals translated into a set of marketing objectives 2. measurement of financial impact of marketing programs 3. tracking of how marketing assets such as the brand and customer relationships are progressing 4. execution of skills and competencies of the marketing team 5. execution of other business processes necessary to deliver customer value 6. continuous refinement of tools to increase access to and usability of customer insights 7. insight on not only what is happening in the market but also why it is happening 8. a diagnostic for prediction, forecasting, and of course remediation 9. ultimately, enhances return on marketing investment (ROMI)

Question 40

Pitfalls of marketing metrics

Answer 40

1. Overreliance on "inside-out" measurement 2. too many tactical metrics; not enough strategic insight 3. forgetting to market the dashboard internally

Question 41

4 basic elements of investment decision in marketing

Answer 41

1. level of investment 2. returns 3. risks 4. hurdle rates

Question 42

Which of the following are sources of Big Data? Select all that apply.

Answer 42

1. social media platforms 2. mobile apps 3. internet connected devices 4. business systems

Question 43

The collection of customer information through _____ systems in retail locations is commonly used to determine a customer's relative value.

Answer 43

point of sales (POS)

Question 44

Data generated through _____ is very diverse and can include profile data as well as posts and emotional reactions to posts.

Answer 44

social media platforms

Question 45

As more smart devices enter the market, and increasing source of structured and unstructured data is being transmitted to companies via _______-_______ devices.

Answer 45

internet-connected

Question 46

Data from _____ _____ is frequently used to help customers find in store details when shopping.

Answer 46

mobile apps

Question 47

Some commercial entities collect big _______ on customers in order to sell ti to other companies as their primary business model.

Answer 47

data

Question 48

Census data and labor statistics are examples of data collected by:

Answer 48

government agencies

Question 49

________ analysis is a type of analytic method that identifies the general attitude contained with a message by an analysis of its content.

Answer 49

sentiment

Question 50

A goal-driven investment approach to marketing that maximizes the opportunity for a firm's offerings to reach their full potential in the marketplace is called:

Answer 50

return on marketing investment

Question 51

Which of the following are commonly expressed objectives about an over reliance on ROMI? Select all that apply.

Answer 51

1. pursuit of ROMI during flat periods can be viewed as "causing" underperformance and suboptimal levels of activity 2. ROMI requires the profit to be divided by expenditure, yet other performance measures consider profit or cash flow after deducting expenditures 3. typically marketing expenditures are not treated as an investment in a company's accounting system

Question 52

_______ is the determination of how to give appropriate credit to different elements of the marketing mix through the measurement of their effects.

Answer 52

attribution

Question 53

Recommendation systems, such as content filtering and collaborative filtering, are examples of _____ using marketing analytics.

Answer 53

personalization

Question 54

An analytic method that identifies which products or services to recommend based on a determination of how similar they are to those that the customer has preferred in the past is ______. content filtering

Answer 54

content filtering

Question 55

Predicting a customer's preference for products or services based on the observed preferences of customers who are perceived to be similar is called:

Answer 55

Collaborative filtering

Question 56

Place the elements of the CRM process cycle in the correct order.

Answer 56

1. Knowledge discovery 2. Marketing planning 3. Customer interaction 4. Analysis and refinement

Question 57

Customer _______ are occurrences in which the selling firm touches the customer in some way and allows for information about him or her to be collected.

Answer 57

Touchpoints

Question 58

Which of the following establishes the best environment for handling all the customer data generated through the touchpoint and transforming those data into useful information for marketing management decision making and planning?

Answer 58

data warehousing

Question 59

________ ________ is a sophisticated analytical approach to using the massive amounts of data accumulated through the CRM to develop segments of customers for purposes of either market research or development of marketing segmentation and target marketing strategies.

Answer 59

data mining

Question 60

_____ marketing involves utilizing the data generated from data mining to contact individuals by various means of marketing communication.

Answer 60

database

Question 61

_____ _____ represents a key use of the output from the knowledge discovery phase.

Answer 61

marketing planning

Question 62

Which phase of the CRM process represents the actual implementation of customer strategies and programs?

Answer 62

customer interaction

Question 63

Which phase of the CRM process represents the actual implementation of customer strategies and programs?

Answer 63

customer interaction

Question 64

In the ______ phase of CRM, organizational learning occurs based on customer response to implemented strategies and programs.

Answer 64

analysis and refinement

Question 65

What is the phase of the CRM process that uses the output from the knowledge discovery phase?

Answer 65

marketing planning

Question 66

Interactive touchpoint might include which of the following situations?

Answer 66

1. A salesperson sells you an upgrade to fix a problem with your cell phone 2. a telemarketer offers you information on a special deal for existing cable customers. 3. A customer service representative helps you follow up on a gift delivery

Question 67

QZB Company experienced a data breach during the holiday gift-giving season. What role can the marketing manager play to help rebuild customer trust?

Answer 67

Proactively communicate the relevant elements of the company's security strategy to ensure that a breach will not occur again

Question 68

A firm that is ______-_______ places the customer at the core of the enterprise including everything that happens, both inside and outside the firm.

Answer 68

customer centric

Question 69

When structure, processes and tools, and managerial knowledge and commitment are formally established in support of the culture it is called:

Answer 69

formalization

Question 70

A person's belief that understanding and satisfying customers, whether internal or external to the organization, is central to the proper execution of his or her job is called:

Answer 70

a customer mind-set

Question 71

Which of the following are benefits of a marketing dashboard? Select all that apply.

Answer 71

1. establishment of direct links between marketing spending and profits 2. facilitation of smoother decision making 3. enhancement of marketing's ability to contribute

Question 72

Two primary goals of any marketing dashboard are _____ insight and _____ foresight.

Answer 72

diagnostic; predictive

Question 73

Which of the following are elements of great marketing dashboards? Select all that apply.

Answer 73

1. efficiency and effectiveness 2. predictive value 3. diagnostic insight 4. tools 5. process 6. skills 7. goals and objectives 8. initiative ROI and resource allocation 9. brand and customer asset evolution

Question 74

A(n) _______ ________ is a comprehensive system providing managers with up-to-the-minute information necessary to run their operation.

Answer 74

marketing dashboard

Question 75

A comprehensive business model for increasing revenues and profits by focusing on customers is called:

Answer 75

customer management relationship

Question 76

_____ analytics utilizes data to provide summary insights.

Answer 76

descriptive

Question 77

________ _______ means the level of liking an individual harbors for an offering.

Answer 77

customer satisfaction

Question 78

_________ _______ refers to the degree to which an individual will resist switching, or defecting, from one offering to another.

Answer 78

customer loyalty

Question 79

The dollar value of a customer relationship based on the present value of the projected future cash flows from the customer relationship is called:

Answer 79

customer lifetime value

Question 80

Return on _____ _____ is an estimate of the projected financial returns from a customer over the long run.

Answer 80

customer investment