Analytics Awareness Quiz

Most CRM programs focus on the operational aspects of customer relationship management: call center management, sales force automation, etc. Analytic CRM, however, concentrates on using sales data as a resource to understand customer behavior, sharpen sales promotions, improve retention and increase customer loyalty. Check your knowledge of Analytic CRM by taking this short self-test. Then compare your answers with the Scoring Guide below. Finally, use the Resource Guide below to learn more about some of these concepts and terms.

What percentage of its customer base does the average company lose every year?

1. 20% to 50%
2. 10% to 20%
3. 5% to 10%

How much can a company build its revenues by increasing retention of its best customers by 5% each year?

1. over 50%
2. 20% to 50%
3. 5% to 20%

How much more does it cost to acquire a new customer than to sell to an existing one?

1. 5 to 10 times more
2. 3 to 4 times more
3. 2 times more

What system or process do you use to manage your customer relationships?

1. Sales Force Automation system
2. Database or Data Warehouse
3. No system or database

If you score your customers as part of the CRM process, what method do you use?

1. Modeling
2. RFM (Recency, Frequency and Monetary value)
3. No scoring

How do you identify customers who may be candidates to buy other products from you?

1. Have a systematic way to identify which products they may buy next.
2. Rely upon the customers to contact you for their needs.
3. Don't try to cross sell

How do you identify customers who are potential defectors?

1. Have a systematic way to spot potential defectors
2. Rely on sales or customer service staff to identify them
3. Don't monitor for defectors

How do you target customer promotions?

1. Send to customers who will be receptive to your offer
2. Send to all customers
3. Don't use promotions

How important are sales-driven financial projections to your company?

1. Very important
2. Slightly important
3. Not important

Scoring Guide

 

Give yourself 3 points for each 1. answer, 2 for each 2. and 1 for each 3. Then compare your total with these guidelines:

24-27: You are on your way to the Fortune 100

12-23: Satisfied with business as usual

1-12: Hope you have a good line of credit at the bank

  

Resource Guide

 

Here are some places to go to learn more about the possibilities of Predictive Analytics, keyed to the question numbers:

1-3. See, for example, Chapter 2 of "The Loyalty Effect" by Frederick F. Reichheld, who has examples from several different industries.

5. See the Loyalty Builders white paper "RFM vs. Loyalty Builders' Modeling."

7. See the Loyalty Builders white paper "How To Use Loyalty Analyses at Your Company."

9. Read the eBook "Field Guide to Mathematical Marketing" and send your feedback to Mark Klein, the author and Loyalty Builders' CEO.