QUESTION 1.

(2 Marks)

What is customer value, and why is this term essential for CRM? How can CRM be defined from customer value perspective?

QUESTION 2. (3 Marks)

Briefly explain four types of information-based databases? Compare active marketing database and passive marketing database?

QUESTION 3. (5 Marks)

1. Calculate the acquisition rate of a bank in Italy if you know the target market of the credit card issuer might have been two million office staffs.
Acquisition was measured in terms of new credit cards issued. The bank issued a total of 120,000 new credit cards.

The accquisition rate (%) = 100% * Number of prospects accquired/Number of prospects targeted = 100% * 120,000/2,000,000 = 6%
2. Calculate the Average Inter-purchse Time (AIT) of a supermarket if customer buys, on average, 4 times at this supermarket during a month

AIT = 1/Number of purchase incidences from the first purchase till the current time period = ¼ * 30 = 7,5 (days)
3. Calculate the Remaining Customers after a period of 5 years, if the constant retention rate is 60%, and in year 0 the company X can acquire 500 customers

Y0 500

Y1 300

Y2 180

Y3 108

Y4 64.8

Y5 38.88

4. Number of customers starting at the beginning of year 1 is 1,000. Computing the number of survivors

  Retention Rate Survival Rate Survivors

Year 1 0.5 0.5 500

Year 2 0.6 0.3 300

Year 3 0.7 0.21 210

Year 4 0.8 0.168 168

Year 5 0.9 0.1512 151.2

5. Compute the P (Active) of the customers in the twelfth month of activity, where customer A bought five times within the first 8 out of the observed 12
months.
n 5
The P (Active) = T = (8/12) = 0.132

QUESTION 1. (3 Marks)

Why Managing Customers Is More Critical Than Ever? List the changes that are essential to understand the growing importance of a strategic approach to CRM?

QUESTION 2. (2 Marks)

Explain what is customer management orientation? What are the key steps in developing a CRM strategy?

QUESTION 3. (5 Marks)

1. Calculate the acquisition rate of a bank in Germany if you know the target market of the credit card issuer might have been 4 millions office staff.

Acquisition was measured in terms of new credit cards issued. The bank issued a total of 200,000 new credit cards.
The accquisition rate (%) = 100% * Number of prospects accquired/Number of prospects targeted = 100% * 200,000/4,000,000 = 5%
2. Calculate the Average Inter-purchse Time (AIT) of a supermarket if customer buys, on average, 5 times at this supermarket during a month.
AIT = 1/Number of purchase incidences from the first purchase till the current time period = 1/5 * 30 = 6 (days)
3. Calculate the Remaining Customers after a period of 5 years, if the constant retention rate is 70%, and in year 0 the company X can acquire 600 customers
 Y0 600

Y1 420

Y2 294

Y3 205.8

Y4 144.06

Y5 100.842
4. Number of customers starting at the beginning of year 1 is 2,000. Computing the number of survivors:

  Retention Rate Survival Rate Survivors

Year 1 0.5 0.5 1,000

Year 2 0.6 0.3 600

Year 3 0.7 0.21 420

Year 4 0.8 0.168 336

Year 5 0.9 0.1512 302.4

5. Compute the P (Active) of the customer in the twelfth month of activity, where customer B bought only two times within the first 8 out of the last 12

month.
n 2
The P (Active) = T = (8/12) = 0.444

QUESTION 1. (3 Marks)

What are three perspectives of CRM? Briefly describe each perspective?

QUESTION 2. (2 Marks)

What is The Loyalty Program Design Characteristics? What are the key questions that have to be answered in order to determine if a Loyalty Program is effective?

QUESTION 3. (5 Marks)

1. Calculate the acquisition rate of a bank in Germany if you know the target market of the credit card issuer might have been 5 million office staffs.

Acquisition was measured in terms of new credit cards issued. The bank issued a total of 100,000 new credit cards.

The accquisition rate (%) = 100% * Number of prospects accquired/Number of prospects targeted = 100% * 100,000/5,000,000 = 2%
2. Calculate the Average Inter-purchase Time (AIT) of a supermarket if customer buys, on average, 6 times at this supermarket during a month

AIT = 1/Number of purchase incidences from the first purchase till the current time period = 1/6 * 30 = 5 (days)
3. Calculate the Remaining Customers after a period of 5 years, if the constant retention rate is 50%, and in year 0 the company X can acquire 600 customers

Y0 600

Y1 300

Y2 150

Y3 75

Y4 37.5

Y5 18.75
4. Number of customers starting at the beginning of year 1 is 2,000. Computing the number of survivors:

  Retention Rate Survival Rate Survivors

Year 1 0.3 0.3 600

Year 2 0.5 0.15 300

Year 3 0.7 0.105 210

Year 4 0.8 0.084 168

Year 5 0.9 0.0756 151.2

5. Compute the P (Active) of customer in the twelfth month of activity, where customer C bought 4 times within the first 8 out of the observed 12 months.
n 4
The P (Active) = T = (8/12) = 0.196
No explanation should be carried out