MISY 5380 MIDTERM EXAMS ANSWERS AND
QUESTIONS SET A+
✔✔CRM enables companies to do all of the following EXCEPT which of the following?
1. Manage upward migration
2. Improve cueing
3. Match callers with the most appropriate CSP
4. Train customers to use the most profitable channels
5. More effectively manage the 4Ps - ✔✔5. More effectively manage the 4Ps
✔✔A data mart is a:
1. data warehouse in digital form.
2. collection of data processing models.
3. subset of a data warehouse.
4. syndicated approach to managing marketing research information.
5. contemporary source of data processing programs. - ✔✔3. subset of a data
warehouse.
✔✔CRM can apply to all levels of customers (cite examples) - ✔✔Customer relationship
management is a difficult business practice to define because: (1) it can apply to 10
different levels of customers—for example, distributors, dealers, lateral partners, and
consumers.
✔✔Sales force automation and B2B markets - ✔✔some of the key components of CRM
shift when considering business-to-business (B2B) versus business-to-consumer (B2C)
relationships—for example, sales force automation is more applicable to the former than
the latter.
✔✔CRM and relationship marketing - ✔✔CRM is a strategic approach that is concerned
with creating improved shareholder value through the development of appropriate
relationships with key customers and customer segments. CRM unites the potential of
relationship marketing strategies and IT to create profitable, long-term relationships with
,customers and other key stakeholders. CRM provides enhanced opportunities to use
data and information to both understand customers and co-create value with them. This
requires a cross-functional integration of processes, people, operations, and marketing
capabilities that is enabled through information, technology, and applications.
✔✔Mass marketing - ✔✔Mass marketing went out of popularity due to companies'
inability to measure results.
Mass marketing, with its emphasis on sending out the same message to millions of
prospects, is being deemphasized in favor of one-to-one marketing's ability to customize
communication with individuals —primarily a company's own customers.
✔✔RFM - ✔✔RFM stands for recency, frequency, and monetary value and is an
approach to compute a score for each customer based on how recently the customer
purchased, how frequently the customer purchases, and how much revenue or profit the
customer generates. The score is used to predict the customer's likely response to
future marketing expenditures and efforts.
✔✔Data Warehouse (DW) - ✔✔A data warehouse is a repository for all relevant
customer and prospect information. Almost anything related to a marketing activity can
be included in the data warehouse, including information from each touch point, sales
force input, and perhaps even survey data. It is a collection of databases in one
database that contains all relevant customer (primary and secondary data) information,
including history, product information, product return activity, marketing promotion, and
campaign data.
✔✔Data mart - ✔✔Data marts are subsets of a data warehouse that contain less depth
or breadth of information, which allows for more efficient analysis by functional,
business unit, or geographic divisions. It is generated from data gleaned from a specific
function.
✔✔360-degree view of the customer - ✔✔360-degree view refers to a consistent view of
the customer from beginning to end of the relationship available to all. The customer
data must be integrated from all business areas, including billing, customer contact,
marketing, and sales.
✔✔Customer lifetime value - ✔✔Customer lifetime value (CLV) is the net present value
of the future profits to be received from a given number of newly acquired or existing
customers during a specified period of years. CLV is calculated by identifying the
revenue stream over time, applying a retention rate for each year, subtracting relevant
costs, and then applying a discount rate to gross profit. CLV takes into account how
much the customer spends on each purchase with the firm and the resulting profit, how
often the customer purchases from the firm, how likely the customer is to remain a
customer in the future, how much it costs to serve the customer, and the organization's
discount rate.
, ✔✔SaaS - ✔✔SaaS (Software as a Service) is a software distribution model in which
applications are hosted by a service provider and respective application functions are
made available as a Web service.
✔✔Touch Points in a CRM System - ✔✔Touch point is a specific area where an
organization and a customer or prospect may interact. Examples of touch points include
the telephone, the Internet, face-to-face, kiosk, and wireless device.
✔✔CRM Ecosystem - ✔✔Through the CRM ecosystem, an organization's front and
back offices are integrated through the exchange of data, systems, and business
processes.
✔✔CRM support to companies - ✔✔Organizations that do not implement CRM systems
in support of relationship marketing strategies are at risk of being seriously
disadvantaged. Customers are beginning to expect the added value delivered through
tailoring products or services to individual customers or micro-segments and are
demanding greater participation in CRM implementation.
✔✔Acquaintance relationships - ✔✔Acquaintance relationships are based on
satisfaction, and companies have to provide only parity value to achieve this (i.e.,
produce products and services equal to the competition).
✔✔CRM benefits - ✔✔Through effective strategies and campaign management,
companies are able to achieve returns on their CRM investment by facilitating customer
loyalty and engendering their migration toward upscale, new, and a greater variety of
products and services. Generating customer referrals also ensures that new customers
will be entering the pipeline.
Some retail banks have realized the following benefits from CRM: 28 An increase in the
average number of products sold per customer over 1 year—from 4.6 to 6.2. A
decrease in administrative costs of 3 to 5 percent over 1 year. A 200 percent return on
technology investment through cost reduction over 1 year. A 96 percent reduction in the
average time it takes for a call center agent to refer a customer to a branch loan office—
from 45 minutes to 2 minutes. An 83 percent decrease in average customer information
retrieval time—from 12 minutes to 2 minutes per customer inquiry. An 80 percent
reduction in average time to escalate a service request that is not resolved during the
initial conversation with a call center agent—from 5 minutes to 1 minute. An 80 percent
reduction in the average time elapsed before a tele sales agent refers a customer to
another business unit to complete a product purchase—from 15 minutes to 3 minutes.
An 80 percent decrease in average preparation time, including employee training and
system setup, prior to the execution of a tele sales campaign—from 40 hours to 8
hours. A 15 percent increase in financial product revenue in 1 year
✔✔Relationship Marketing - ✔✔Relationship marketing is a focus on the relationships
between the firm and its customers based on cooperation and collaboration. According
to J. Compton, it is "the ongoing process of engaging in cooperative and collaborative
QUESTIONS SET A+
✔✔CRM enables companies to do all of the following EXCEPT which of the following?
1. Manage upward migration
2. Improve cueing
3. Match callers with the most appropriate CSP
4. Train customers to use the most profitable channels
5. More effectively manage the 4Ps - ✔✔5. More effectively manage the 4Ps
✔✔A data mart is a:
1. data warehouse in digital form.
2. collection of data processing models.
3. subset of a data warehouse.
4. syndicated approach to managing marketing research information.
5. contemporary source of data processing programs. - ✔✔3. subset of a data
warehouse.
✔✔CRM can apply to all levels of customers (cite examples) - ✔✔Customer relationship
management is a difficult business practice to define because: (1) it can apply to 10
different levels of customers—for example, distributors, dealers, lateral partners, and
consumers.
✔✔Sales force automation and B2B markets - ✔✔some of the key components of CRM
shift when considering business-to-business (B2B) versus business-to-consumer (B2C)
relationships—for example, sales force automation is more applicable to the former than
the latter.
✔✔CRM and relationship marketing - ✔✔CRM is a strategic approach that is concerned
with creating improved shareholder value through the development of appropriate
relationships with key customers and customer segments. CRM unites the potential of
relationship marketing strategies and IT to create profitable, long-term relationships with
,customers and other key stakeholders. CRM provides enhanced opportunities to use
data and information to both understand customers and co-create value with them. This
requires a cross-functional integration of processes, people, operations, and marketing
capabilities that is enabled through information, technology, and applications.
✔✔Mass marketing - ✔✔Mass marketing went out of popularity due to companies'
inability to measure results.
Mass marketing, with its emphasis on sending out the same message to millions of
prospects, is being deemphasized in favor of one-to-one marketing's ability to customize
communication with individuals —primarily a company's own customers.
✔✔RFM - ✔✔RFM stands for recency, frequency, and monetary value and is an
approach to compute a score for each customer based on how recently the customer
purchased, how frequently the customer purchases, and how much revenue or profit the
customer generates. The score is used to predict the customer's likely response to
future marketing expenditures and efforts.
✔✔Data Warehouse (DW) - ✔✔A data warehouse is a repository for all relevant
customer and prospect information. Almost anything related to a marketing activity can
be included in the data warehouse, including information from each touch point, sales
force input, and perhaps even survey data. It is a collection of databases in one
database that contains all relevant customer (primary and secondary data) information,
including history, product information, product return activity, marketing promotion, and
campaign data.
✔✔Data mart - ✔✔Data marts are subsets of a data warehouse that contain less depth
or breadth of information, which allows for more efficient analysis by functional,
business unit, or geographic divisions. It is generated from data gleaned from a specific
function.
✔✔360-degree view of the customer - ✔✔360-degree view refers to a consistent view of
the customer from beginning to end of the relationship available to all. The customer
data must be integrated from all business areas, including billing, customer contact,
marketing, and sales.
✔✔Customer lifetime value - ✔✔Customer lifetime value (CLV) is the net present value
of the future profits to be received from a given number of newly acquired or existing
customers during a specified period of years. CLV is calculated by identifying the
revenue stream over time, applying a retention rate for each year, subtracting relevant
costs, and then applying a discount rate to gross profit. CLV takes into account how
much the customer spends on each purchase with the firm and the resulting profit, how
often the customer purchases from the firm, how likely the customer is to remain a
customer in the future, how much it costs to serve the customer, and the organization's
discount rate.
, ✔✔SaaS - ✔✔SaaS (Software as a Service) is a software distribution model in which
applications are hosted by a service provider and respective application functions are
made available as a Web service.
✔✔Touch Points in a CRM System - ✔✔Touch point is a specific area where an
organization and a customer or prospect may interact. Examples of touch points include
the telephone, the Internet, face-to-face, kiosk, and wireless device.
✔✔CRM Ecosystem - ✔✔Through the CRM ecosystem, an organization's front and
back offices are integrated through the exchange of data, systems, and business
processes.
✔✔CRM support to companies - ✔✔Organizations that do not implement CRM systems
in support of relationship marketing strategies are at risk of being seriously
disadvantaged. Customers are beginning to expect the added value delivered through
tailoring products or services to individual customers or micro-segments and are
demanding greater participation in CRM implementation.
✔✔Acquaintance relationships - ✔✔Acquaintance relationships are based on
satisfaction, and companies have to provide only parity value to achieve this (i.e.,
produce products and services equal to the competition).
✔✔CRM benefits - ✔✔Through effective strategies and campaign management,
companies are able to achieve returns on their CRM investment by facilitating customer
loyalty and engendering their migration toward upscale, new, and a greater variety of
products and services. Generating customer referrals also ensures that new customers
will be entering the pipeline.
Some retail banks have realized the following benefits from CRM: 28 An increase in the
average number of products sold per customer over 1 year—from 4.6 to 6.2. A
decrease in administrative costs of 3 to 5 percent over 1 year. A 200 percent return on
technology investment through cost reduction over 1 year. A 96 percent reduction in the
average time it takes for a call center agent to refer a customer to a branch loan office—
from 45 minutes to 2 minutes. An 83 percent decrease in average customer information
retrieval time—from 12 minutes to 2 minutes per customer inquiry. An 80 percent
reduction in average time to escalate a service request that is not resolved during the
initial conversation with a call center agent—from 5 minutes to 1 minute. An 80 percent
reduction in the average time elapsed before a tele sales agent refers a customer to
another business unit to complete a product purchase—from 15 minutes to 3 minutes.
An 80 percent decrease in average preparation time, including employee training and
system setup, prior to the execution of a tele sales campaign—from 40 hours to 8
hours. A 15 percent increase in financial product revenue in 1 year
✔✔Relationship Marketing - ✔✔Relationship marketing is a focus on the relationships
between the firm and its customers based on cooperation and collaboration. According
to J. Compton, it is "the ongoing process of engaging in cooperative and collaborative
