The Customer Loyalty Solution : What Works (and What Doesnt) in Customer Loyalty Programs

1.

Why do most marketers choose segment marketing over one-to-one marketing?

  1. One-to-one marketing does not work.

  2. Segments are easy to create.

  3. They don’t know how to do one-to-one marketing.

  4. Segments cost less but produce similar results.

  5. One-to-one marketing produces a much higher lift in sales.

2.

Which of the following are not considered demographic data?

  1. Age

  2. Preferences

  3. Ethnicity

  4. Income

  5. Value of home

3.

What technique does iDine use that most marketers are not using today?

  1. Creating customer segments

  2. Credit card matching

  3. Air miles as a reward

  4. Cash as a reward

  5. Transactions viewed on the Web

4.

Which is not listed as a feature of the Australian National Leads program?

  1. Web customer response

  2. Customer segmentation

  3. Nightly trawling of the data warehouse

  4. Prediction of customer propensity to purchase

  5. Offers based on transactions

5.

What is the best strategy for Quadrant 3 – the low lows?

  1. Retention

  2. Expansion

  3. Ignoring them

  4. Repricing their services

  5. Rewards for good behavior

6.

Which was not a result of the Kmart mothers-to-be program?

  1. Hispanic baby product sales were up 25 percent.

  2. Cross shopping was reduced by 35 percent.

  3. Twenty-one percent of top-decile shoppers increased their spending by 40 percent.

  4. Targeted customers outperformed the control by 4 to 1.

  5. None of the above; all were results of the promotion.

7.

Compute the lift in sales in the following table.

Number promoted

Sales rate

Lift in

Lift sales

Teens

100,000

8.80%

Control

20,000

7.00%

20s and 30s

100,000

6.60%

Control

20,000

5.80%

40s and 50s

90,000

7.20%

Control

20,000

6.00%

Seniors

60,000

5.10%

Control

20,000

4.30%

Total

430,000

8.

Which of the following is the best number of segments to create for segment marketing?

  1. 100

  2. 80

  3. 50

  4. 12

  5. 6

9.

What is the best way to design segments?

  1. Something that you can relate to and design programs for

  2. RFM groupings

  3. LTV segments

  4. SIC segments

  5. None of the above

10.

When should segments be revised?

  1. Monthly

  2. Quarterly

  3. Never; keep them consistent

  4. After each promotion

  5. Once a year

Answers

1.

(d) Segments cost less but produce similar results.

2.

(b) Preferences

3.

(b) Credit card matching

4.

(a) Web customer response

5.

(c) Ignoring them

6.

(b) Cross shopping was reduced by 35 percent (it increased by 35 percent).

7.

Number promoted

Sales rate

Lift

Lift in sales

Teens

100,000

8.80%

1.80%

1,800

Control

20,000

7.00%

20s and 30s

100,000

6.60%

0.80%

800

Control

20,000

5.80%

40s and 50s

90,000

7.20%

1.20%

1,080

Control

20,000

6.00%

Seniors

60,000

5.10%

0.80%

480

Control

20,000

4.30%

Total

430,000

4,160

8.

(e) 6

9.

(a) Something that you can relate to and design programs for

10.

(d) After each promotion.

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