Mastering Tier-Based Loyalty Programs and RFM
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Questions and Answers

Which concept is crucial in tier-based loyalty programs?

  • Recency Frequency and Monetary value (RFM) (correct)
  • Customer Lifetime Value (CLV)
  • Customer Relationship Management (CRM)
  • Return on Investment (ROI)

Why do many brands prefer tier-based loyalty programs?

  • They are easy for customers to understand and join. (correct)
  • They help increase customer lifetime value.
  • They provide better return on investment.
  • They allow for better customer relationship management.

What is the key to effective customer differentiation in tier-based loyalty programs?

  • Providing special treatment and rewards to all customers
  • Segmenting customers based on RFM (correct)
  • Treating all customers the same way
  • Encouraging non-active customers to return to the store

What do tier strategies in loyalty programs involve?

<p>Creating different tiers and grouping customers accordingly (D)</p> Signup and view all the answers

What is the purpose of establishing eligibility criteria for each tier in loyalty programs?

<p>To ensure fair treatment of all customers (A)</p> Signup and view all the answers

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