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Customer loyalty quiz answers

Every organization struggles with customer loyalty. Find out how much you know about customer loyalty with the answers to's Customer loyalty quiz.

1) The correct answer is A.
Customer lifecycle is used to describe the progression of steps a customer goes through when considering, purchasing, using, and maintaining loyalty to a product or service. The customer lifecycle can be depicted by an ellipse, representing the cyclical nature of customer retention and showing that the goal of effective CRM is to get the customer to move through the cycle again and again.

Learn more about customer lifecycle in this definition from

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2) The correct answer is A.
Speech analytics used in the call center can improve call quality and the customer experience. According to Donna Fluss, principal of DMG Consulting, "there is an abundance of rich but unstructured information that comes directly into the contact center -- and speech analytics systems structure conversations and extract the invaluable data and insights hidden in customer interactions." Speech analytics applications are applied to recorded conversations, but may take place in real time in the future. Thus, contact centers will be able to be more proactive in providing a superior customer experience.

Find out more in Fluss's Speech Analytics Market Report.

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3) The correct answer is B.
Churn rate is an important business metric that companies can use to find out how many customers they have lost over a period of time. The churn rate can be used to discover customers' responses to changes in service or pricing or find out the average length of time a customer stays with a company.

Read the definition of churn rate.

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4) The correct answer is C.
One-to-one marketing (sometimes expressed as 1:1 marketing) is a strategy that emphasizes personalized interactions with customers. The personalization of interactions is thought to foster greater customer loyalty and better return on marketing investment.

Learn more in the definition of one-to-one marketing. And, find out more about customer loyalty and marketing with this expert answer on relationship marketing vs. transactional marketing.

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5) The correct answer is D.
In Paul Timm's book, "Technology and Customer Service: Profitable Relationship Building," he offers suggestions for using call centers to build customer loyalty. Among other directives, he says that call center agents should take greater customer service responsibility and solve the customer's problem.

Read this customer loyalty tip for more information.

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6) The correct answer is C.
Speech analytics and voice technology are making inroads in the call center. According to this recent article, Speech being heard in the contact center, the speech analytics market has been growing 18% to 19% a year for the last three years. Call center managers are turning to speech technology because they want to improve the customer experience, cut down on the frustration of entering account numbers multiple times and reduce the number of calls transferred.

Read more in this news story: Speech being heard in the contact center.

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7) The correct answer is D.
According to a recent article, Social networks forcing customer service change, companies are rethinking customer service and loyalty. Michael Maoz of Gartner says that "Customers expect a seamless experience, one that reaches across channels, whether they contact a company first via the Web or online, they want to be able to continue that process in the other channel.
Additionally, "secret" service is enabling this process, acting as an unseen person in the communication loop aiding the experience, whether it's through proactive chat when someone abandons an online shopping cart or a premier customer struggling with the IVR. Service avoidance is also emerging as customers are turning to communities of their peers to help solve problems." Maoz also says that companies should use outsourcers for basic services and efficiencies and direct in-house resources to higher-ROI initiatives.

Read more in this article: Social networks forcing customer service change.

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8) The correct answer is C.
A study by Tucson, Ariz.-based Ponemon Institute found that costs for a single data breach can range from $5 million to $50 million and average $140 per lost customer record.

Find out more in this article: Marketers see data breach danger, remain unprepared.

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9) The correct answer is C.
Research firm CMO Council, Inc. studied the effects of data breaches on customer loyalty. Companies should have strong policies in place before data breaches happen, should respond quickly to a problem and should offer restitution or free credit monitoring to customers afterwards. Keeping customers in the dark will not improve loyalty.

Learn more in this news story: Marketers see data breach danger, remain unprepared.

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10) The correct answer is D.
A article on Getting loyalty programs right offers suggestions on building and maintaining customer loyalty programs. Companies should ensure that the program will offer a payback and should use their data right. They should also make sure that all employees are well-versed in the details of the program. But, a loyalty program should reward profitable customers, not all customers.

Read more in this article: Getting loyalty programs right.

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This was last published in February 2007

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