Customer Relationship Marketing

CRM Final Test

50 cards   |   Total Attempts: 188
  

Cards In This Set

Front Back
Customer Lifetime Value
The sum of discounted cash flows from a customer over the lifetime of the relationship with that customer
Three LTV Analysis
Simple LTV, LTV with Retention Rate, and Forecasted Lifetime Value
Forecasted Customer Lifetime Value
An alternative method for valuing customers that is based on evaluating the expected revenue stream from each customer over future time periods
Discount Rate:
Time-value of money ( future revenue is worth less today than current revenue)
Predicted Survival Rate:
Cumulative retention rate over time
Earlier Method of Profitable Customer Lifetime
Only considered the revenue and costs
Present Method:
Takes into consideration the market characteristics, individual differences ,and purchase settings
When to terminate relationship?
-if expected npv of future contribution margins is less than the contact cost, if discount rate is assumed to be fixed, and decision rule incorporates the cost of mailings and an average flat contribution margin before mailings
Conjoint Analysis
Attempts to determine the relative importance consumers attach to attributes and the value they attach to the levels of attributes
Conducting Conjoint Analysis
1. formulate the problem 2. construct the stimuli 3. decide the form of input data 4. select a conjoint analysis procedure 5. interpret the results 6. assess reliability and validity
Pairwise approach:
Two factor evaluation- the respondents evaluate two attributes at a time until all the possible pairs of attributes have been evaluated
Full-profile approach
Multiple-factor evaluations- full or complete profiles of brands are constructed for all the attributes
How  can one reduce the number of paired comparisons and number of stimulus profiles?
Cyclical designs- pairwise approachfractional factorial designs- full profile approach
Advantage of Pairwise Comparisons
Easier for subjects to make a tradeoff between two attribute levels, particularly useful when there are a large number of attributes to be tested
Disadvantage of Pair-wise comparisons:
Stimuli may be unrealistic since two products may differ on more than two attributes