Quiz 2
Question 1
Because of technology-enabled product development, product life cycles are much shorter now, and
companies are constantly reiterating and thinking of new ideas. Which “crack in product centricity” captures
this?
Your Answer
Commoditization
Score
Explanation
Correct 1.00
Globalization
Saturation
Innovation
Total
1.00 / 1.00
Question 2
Which of the following is NOT a crack in the product-centric approach?
Your Answer
Score
Explanation
Retail saturation
Globalization
Customer attrition
Correct 1.00
Smart customers
Deregulation
Total
1.00 / 1.00
Question 3
Which of the following is not true about direct marketing?
Your Answer
It aims to determine marketing communication based on past purchases
Score
Explanation
It allows companies to know who their customers are and what they buy
It determines and leverages combined customer value
The individual customer is the unit of analysis
Inorrect 0.00
Total
0.00 / 1.00
Question 4
Which of these retailers would Professor Fader describe as highly customer centric?
Your Answer
Score
Explanation
All of them
Nordstrom
Starbucks
Apple
Walmart
None of them
Total
Correct 1.00
1.00 / 1.00
Question 5
What is the correct definition of customer centricity?
Your Answer
Customer centricity is a strategy that aligns a company’s
development/delivery of its products/services around the future needs of a select
set of customers in order to maximize their short-term financial value to the firm.
Customer centricity is a strategy that aligns a company’s
development/delivery of its products/services around the future needs of a select
set of customers in order to maximize their long-term financial value to the firm.
Score Explanation
Customer centricity is a strategy that aligns a company’s
development/delivery of its products/services around the current needs of a select
set of customers in order to maximize their long-term financial value to the firm.
Customer centricity is a strategy that aligns a company’s
development/delivery of its products/services around the current and future needs Correct 1.00
of a select set of customers in order to maximize their long-term financial value to
the firm.
1.00 /
Total
1.00
Question 6
Professor Fader discussed “salesperson of the month.” What would he say is the best way to pick a salesperson of
the month?
Your Answer
Score
Explanation
The number of quality referrals they generate.
The change in total customer lifetime value for that month.
Correct 1.00
The number of repeat purchases made by existing customers.
The number of new customers brought in.
Total
1.00 / 1.00
Question 7
Is maximizing shareholder value the overarching objective for a customer-centric commercial enterprise or a
product-centric commercial enterprise?
Your Answer
Both
Score
Correct 1.00
Product-centric
Customer-centric
Neither
Total
1.00 / 1.00
Explanation
Question 8
According to Professor Fader, success in a customer-centric world arises through enhanced and/or more efficient
levels of the following EXCEPT:
Your Answer
Score
Explanation
Customer development
Customer acquisition
Customer experience
Correct 1.00
Customer retention
Total
1.00 / 1.00
Question 9
True or False. Customer centricity suggests that you should “fire” (i.e. get rid of) your least valuable customers.
Your Answer
False
Score
Explanation
Correct 1.00
True
Total
1.00 / 1.00
Question 10
In a product-centric company, sales bias is on the side of the ____________ in a transaction.
Your Answer
Score
Explanation
Market
Broker
Buyer
Inorrect 0.00
Seller
Total
0.00 / 1.00
Question 11
Regarding customer acquisition, Professor Fader would say that instead of “cost per acquisition” (CPA), firms
would be better off measuring “___________ per acquisition.”
Your Answer
Score
Explanation
Revenue
Marginal cost
Referrals
Value
Correct 1.00
Total
1.00 / 1.00
Question 12
Customer lifetime value should be _________ the amount you would want to spend to acquire a customer.
Your Answer
Score
Explanation
Less than
Greater than
Correct 1.00
Equal to
Independent of
Total
1.00 / 1.00
Question 13
An annual churn rate of 55% means that:
Your Answer
You have lost 55% of your customers during that year.
Score
Correct 1.00
55% of your customers have changed their buying habits.
You have gained 55% of your customers during that year.
You have replaced 55% of your customers with new customers.
Total
1.00 / 1.00
Explanation
Question 14
If your attrition rate is 20%, then your typical customer lifetime is:
Your Answer
Score
Explanation
40 years
20 years
5 years
Correct 1.00
1 year
Total
1.00 / 1.00
Question 15
All of the following are common explanations for low attrition rates except for:
Your Answer
Customer dissatisfaction
Score
Explanation
Correct 1.00
High switching costs
Customer inertia
Customer loyalty
Total
Question 16
1.00 / 1.00
What is the correct overall expected lifetime of this customer base?
Your Answer
Score
Explanation
16.8 years
13.3 years
Correct 1.00
4.8 years
7.3 years
Total
1.00 / 1.00
Question 17
Sometimes at McDonald’s your cashier will ask you, “Do you want fries with that?” What is this an example of?
Your Answer
Score
Explanation
Correct 1.00
Cross-selling
Up-selling
Premium pricing
Customer needs assessment
Total
1.00 / 1.00
Question 18
The relationship between “share of wallet” and “size of wallet” is:
Your Answer
Score
Generally positive but cyclical
Directly proportional
Inversely proportional
There is no clear relationship between share of wallet and size of wallet
Total
Correct 1.00
1.00 / 1.00
Explanation
Question 19
Which of the following is the best example of up-selling?
Your Answer
Score
Explanation
A customer deciding to purchase a more expensive laptop brand than her
previous one.
A cosmetics salesperson bringing in more sales than the rest of her team.
A customer buying paper plates in bulk for a party he is going to host.
A car salesperson asking if a customer wants to get a “sport package” for a Correct 1.00
car she is buying.
1.00 /
Total
1.00
Question 20
One of the main concepts from the past few weeks has been customer heterogeneity. What does that mean?
Your Answer
Score Explanation
Identifying your most profitable customers and allocating all of your resources to
them.
Giving individual attention to each of your customers.
Recognizing that some customers are more profitable than others since all
customers are not inherently equal.
Acknowledging that demographic differences drive behavioral outcomes.
Total
Correct 1.00