2. According to the authors, what common interest do enterprises and customers now share in the context of privacy?
a. creating a mutually profitable relationship
b. loosening Europe’s privacy laws
c. loosening U.S. privacy laws
d. protecting customer information

10. The actual economic value of any business enterprise can be measured in terms of:
a. the discounted net present value of the future stream of cash flow
b. the future value of the net present cash flow
c. the discounted net present value of average past earnings
d. the future value of past net cash flow

12. Which is the most relevant customer strategy for research & development?
a. refining the organization
b. accessing real-time customer information
c. improving employee culture
d. establishing test cells and control groups

13. All of the following are ways a customer-strategy enterprise might meet the goal of maximizing the customer base except:
a. retaining profitable customers and growing them
b. acquiring as many new customers as possible
c. eliminating unprofitable customers
d. customizing products, prices, services, and/or communications for each customer

17. Legacy metrics include all of the following EXCEPT:
a. quarterly product sales
b. number of new customers acquired
c. return on customer
d. return on investment

18. All of the following are factors in defining customer equity except:
a. acquiring more customers
b. acquiring more valuable customers
c. reducing customer attrition
d. increasing service costs per customer

19. All of the following are points to consider in creating a privacy pledge EXCEPT:
a. Specify how personal information will be used by the company.
b. State how a customer can change or update personal information it has collected. .
c. State how a customer can order the company to stop collecting information and/or purge her information file.
d. none of the above

20. Which of the following statements is true about using satisfaction as a proxy for measuring loyalty?
a. Loyal customers are likely to be satisfied, and satisfied customers are likely to be loyal.
b. Loyal customers are likely to be satisfied, but not all satisfied customers will be loyal.
c. Not all loyal customers are satisfied, but satisfied customers are likely to be loyal.
d. Not all loyal customers will be satisfied, and not all satisfied customers will be loyal.

21. When listening to customer conversations online, the primary things to monitor are:
a. brand and customer
b. brand and super-users
c. competition and super-users
d. super-users and responders


22. The greatest competitive advantage in managing employees in a customer-strategy organization lies in:
a. Using technology to automate more routine jobs.
b. Equalizing salaries to value lower-tier employees.
c. Making the most talented employees more productive.
d. Setting clear rules about personal use of company resources.

27. The following have increased the importance of trust in today’s marketplace except:
a. speed of technology
b. open-source products
c. rate-the-rater mechanisms
d. privacy policies


28. The two kinds of customization that provide the greatest competitive advantage are:
a. Adaptive and cosmetic
b. Collaborative and transparent
c. Adaptive and collaborative
d. Cosmetic and transparent


29. For the customer service department, when considering self-service options for customers, what is the best approach?
a. prioritizing direct CSR contact with the customer whenever possible
b. prioritizing self-service for the customer whenever possible
c. balancing CSR contact and self-service
d. having all options available to all customers, and allowing the customer to choose
• CSR: Customer Service Representative


30. The document governing privacy protection in Europe is:
a. United Nations Declaration of Human Rights
b. European Convention on Human Rights
c. Safe Harbor agreement
d. European Union Data Protection Directive


32. Which of the following aspects would be part of a customer’s enhanced need set?
a. Timing or frequency
b. Promotion and marketing communication
c. Related products or services
d. Help lines and product support

36. One of the challenges in a sales department’s transition to customer strategy is:
a. more sales reps have fewer responsibilities
b. it becomes more difficult to share information across the firm
c. commissions often decrease
d. sales reps’ work becomes more visible

40. Customer equity includes the LTV of:
a. past and present customers
b. present and future customers
c. present customers only
d. past, present, and future customers

41. An enterprise seeking to create an online community to encourage crowd service would likely do all of the following EXCEPT:
a. invite super-users to join the community
b. provide economic rewards for participating
c. advertise the community
d. provide a means for users to rate super-users’ answers

47. According to Marijo Puleo, a customer-strategy organization’s first investment should be in:
a. establishing a customer-centric vision
b. employee training and hiring
c. information technology
d. organizational reordering

44. Which of the following reasons help explain why companies tend to focus on short-term performance?
a. the investment community’s obsession with short-term performance
b. Because they believe that it is more rational and constructive.
c. customers’ obsession with short-term performance
d. a and c

45. The primary purpose of customer analytics is:
a. develop a deeper relationship with the customer
b. assign a dollar value to customer data
c. reduce marketing expenses
d. increase customer service

46. The metric that measures how well an enterprise is using customers to create short-term and long-term value is:
a. return on investment
b. return on customer
c. return on equity
d. total shareholder return

49. The highest level of consciousness in the development of the organization is:
a. Internal cohesion
b. External cohesion
c. Transformation
d. Self-esteem

50. Permission marketing is an old concept with new relevance because:
a. dating is now more common than arranged marriages
b. permission marketing is more time-efficient than interruption marketing
c. permission marketing takes advantage of new technology better than interruption marketing
d. permission marketing costs less money than interruption marketing

51. Predictive modeling includes all of the following steps except:
a. devising an equation for LTV that includes data on measurable behaviors
b. identifying the most predictive variables currently available
c. generating a second equation to predict individual customer’s LTV
d. using transactional data to calculate LTV retrospectively

52. “Dirty” data can mean all of the following except:
a. private
b. expired
c. irrelevant
d. nonsequential

53. Gupta and Lehmann’s customer equity study showed that customer equity was measurably impacted most by:
a. reducing the cost of new customer acquisition
b. increasing customer retention rates
c. raising product margins
d. increasing stock prices

54. One way to summarize the seemingly contradictory data about consumer privacy attitudes is:
a. Consumers prefer personalized, relevant marketing messages, even with questionable security.
b. Consumers prefer to remain inconspicuous, even if it means being unable to identify someone when they need to.
c. Consumers want both maximum convenience and maximum privacy.
d. Consumers prefer to share as little information with companies as possible, even if it means less relevance.

55. The 1-9-90 dynamic is most akin to:
a. exponential distribution
b. a bell curve
c. a power law distribution
d. a normal distribution

56. The demand chain includes all of the following except:
a. sales
b. production
c. marketing
d. customer service


63. Another term for contributing to open source projects is:
a. super-user
b. crowd service
c. self-service
d. social media

64. What is the biggest obstacle for most companies making the transition to becoming a customer-strategy enterprise?
a. Transforming employee culture
b. Establishing new and consistent criteria and metrics for success in a customer-centric environment
c. Appointing capabilities managers
d. Relationship governance

65. Customer analytics provides what missing link for understanding customers?
a. classification
b. analysis
c. interaction
d. prediction

66. The picket fence strategy is best suited for:
a. small-to-medium businesses
b. large businesses
c. businesses who already identify customers individually and differentiate them by value
d. businesses who do not yet identify or differentiate their customers individually

67. According to the case study presented in Chapter 12, Verizon Wireless discovered which of the following benefits from customer analytics?
a. short-term revenue increase
b. reduced marketing costs
c. reduced customer service costs
d. easier and faster transactions


68. All of the following agreements would likely ease the sales department’s transition except:
a. addressing ways salespeople can save time and earn higher commissions
b. phasing out the use of sales force automation software
c. specifying which information is for enterprise use and which is for their use only
d. prioritizing which information is needed about customers

69. In the transition to a customer-strategy enterprise, the human resources department plays all of the following roles except:
a. evaluating whether the company has the capability to change
b. addressing all key recruiting, training, and ongoing support issues
c. creating new career path opportunities
d. aligning technology implementation with business strategy