Quiz Chapter 8

Instructions

1. All answer are in Multiple Choice Answers.

2.The minimum requirement to complete quiz is 50% Score. Failure to do so will make you retake the quiz before moving to the next Chapter.

Why is customer retention considered more profitable than customer acquisition?

Retaining customers costs more than acquiring new ones

Retaining customers is cheaper and maximizes the value of your existing customer base

Acquiring new customers leads to higher revenue

Retention has no impact on profitability

None

What is one of the key benefits of building customer loyalty?

Loyal customers only provide feedback, but do not return

Loyal customers are less likely to refer your business to others

Loyal customers are more likely to refer your business, provide feedback, and spend more over time

Loyalty does not affect customer spending

None

How does customer retention contribute to predictable revenue streams?

Retained customers have no impact on revenue stability

High retention rates make it difficult to forecast income

A loyal customer base allows for more accurate revenue forecasting and business stability

Retention makes your business more vulnerable to market fluctuations

None

In what way does customer retention provide a competitive advantage?

It reduces the need for customer service

It sets you apart from competitors by building strong, lasting customer relationships

It makes customers more likely to switch to competitors

It decreases your market share

None

How does customer retention impact Customer Lifetime Value (CLV)?

Retention decreases CLV over time

High retention increases CLV, boosting overall profitability

CLV remains the same regardless of retention efforts

CLV is unaffected by customer retention rates

None

What is the financial impact of increasing your customer retention rate from 15% to 30% in the provided example?

Revenue remains the same

Revenue decreases due to higher retention costs

Revenue increases from 174,000 to nearly 500,000

Revenue doubles but does not reach $500,000

None

Why is retention described as the “lifeblood” of a business?

It is the most challenging aspect of running a business

Retention is cost-effective, builds loyalty, and creates predictable revenue

It has no real impact on long-term business success

Retention is only important for large businesses

None

What is a key takeaway from the lesson on customer retention?

Focus on acquiring as many new customers as possible

Prioritizing customer retention can significantly increase revenue and long-term business success

Retention efforts should be minimized to save costs

Customer retention has minimal impact on overall business growth

None

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