CCRS Customer Lifetime Value & Churn Management 2

Question 1

What does 'negative churn' indicate in a subscription business?

Accepted Answer

Expansion revenue from existing customers exceeds revenue lost from churned customers

Answer

The business is losing more customers than it is gaining

Answer

Customer satisfaction scores have dropped below zero

Answer

The churn rate formula returned a calculation error

Question 2

How is Net Revenue Retention (NRR) calculated?

Accepted Answer

(Starting MRR + Expansion MRR − Churned MRR − Contraction MRR) / Starting MRR × 100

Answer

(New MRR / Total MRR) × 100

Answer

(Churned MRR / Starting MRR) × 100

Answer

(Total Revenue − Acquisition Cost) / Total Customers × 100

Question 3

Which customer segmentation model is most commonly used to identify high-value customers at churn risk?

Accepted Answer

RFM (Recency, Frequency, Monetary) Analysis

Answer

SPIN Selling Model

Answer

AIDA (Attention, Interest, Desire, Action) Model

Answer

BCG Matrix

Question 4

What is the primary purpose of a churn cohort analysis?

Accepted Answer

To track churn rates of specific customer groups acquired during the same time period

Answer

To calculate the total revenue generated by all customers in a quarter

Answer

To identify which sales representatives have the highest cancellation rates

Answer

To measure the effectiveness of customer service response times

Question 5

What metric represents the average duration a customer remains active before churning?

Accepted Answer

Average Customer Lifespan

Answer

Customer Acquisition Cost (CAC)

Answer

Net Promoter Score (NPS)

Answer

Monthly Recurring Revenue (MRR)

Question 6

What is 'expansion revenue' in the context of customer retention?

Accepted Answer

Additional revenue generated from existing customers through upsells, cross-sells, or add-ons

Answer

Revenue from acquiring new customers in new geographic markets

Answer

Revenue recovered from previously churned customers through win-back campaigns

Answer

Revenue earned from referral bonuses paid to loyal customers

Question 7

Which strategy is most effective for reducing involuntary churn caused by failed payments?

Accepted Answer

Implementing automated dunning processes with retry logic and card update prompts

Answer

Offering customers a discount on their next renewal

Answer

Manually calling every customer with a failed payment to negotiate a plan

Answer

Automatically canceling and re-enrolling customers with failed payments