16 Questions
What does Customer Lifetime Value measure?
The average customer's revenue generated over their entire relationship with a company
How can companies use CLV for customer segmentation?
To segment different customers and take appropriate actions to retain profitable customers
What should a company do if the cost of acquiring customers (CAC) is higher than the Customer Lifetime Value (CLV)?
Lower the CAC
Which of the following is an example of an indirect cost?
Rent
What is the contribution to margin if the sales price is $2.00 per pack of Oreos and the direct cost is $0.40 per pack?
$1.60
How many packs of Oreos need to be sold to break even if the indirect costs are $16,000 and the contribution to margin is $1.60?
1,000 packs
If there is a required profit, what is the Break-Even formula for determining the Break-Even Point in Units?
(Indirect Costs + Required Profit) ÷ (Price - Direct Costs)
What types of costs can be directly tied to the production of specific goods or services?
Direct costs
If a company wants to cover production costs, what financial calculation can be used?
Break-Even Analysis
Which business gained the highest number of new customers through their marketing investment?
Gourmet Coffee Shop
Which business had the highest average purchase value per customer gained through their marketing campaign?
Luxury Watch Retailer
Which business acquired the highest number of clients through their marketing investment?
Digital Marketing Agency
Which business had the highest average spending per customer?
Home Decor Store
Which business had the lowest average spending per customer?
Virtual Reality Arcade
Which business had the highest return on investment (ROI) based on the number of new customers gained?
Organic Grocery Store
Which business had the lowest return on investment (ROI) based on the number of new customers gained?
Music School
Test your knowledge on Customer Lifetime Value (CLV) and customer segmentation. Understand how CLV is used to measure the average customer's revenue over their entire relationship with a company and how it can be used to segment different customers for appropriate actions.
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