EXAM ONE (Topic Two)

Question 1

Is the process of collecting, measuring, and analyzing data from digital sources such as websites or mobile apps

Answer 1

Digital Analytics

Question 2

What are the two sides (dimensions) of customer value?:

Answer 2

1. Customer Experience
2. Customer Profitability

Question 3

The four customer segments using the two dimensions of customer value

Answer 3

1. Star Customers: Great experience & High Profitability
2. Free Riders: Great experience & Low Profitability
3. Vulnerable Customers: Bad experience & High Profitability
4. Lost Causes: Bad Experience & Low Profitability

Question 4

Explain Customer Lifetime Value

Answer 4

Present value of future streams of profits
or
Measures the total revenue a company can expect from a customer during their entire relationship

Question 5

The four factors used to measure Profitability

Answer 5

• How often the customer purchase from your company.
• How much the customer spends with your company.
• Cost of acquiring and retaining
• The revenue generated by referrals made by the customer

Question 6

Using information from the past to estimate or predict values in the future

Answer 6

Predicting CLV

Question 7

Expected Customer Lifetime (ECL) formula

Answer 7

1/Churn Rate

Question 8

Customer Churn Rate Formula

Answer 8

100% - r (r is retention)

Question 9

Customer Retention Rate

Answer 9

100% - churn rate

Question 10

How to calculate Customer Lifetime Value based on ECL?

Answer 10

CLV = (profit margin) * (ECL) – (acquisition cost)