CCRS Customer Lifetime Value & Churn Management 3

Question 1

How does the Pareto Principle (80/20 rule) most commonly apply to customer retention strategy?

Accepted Answer

Approximately 80% of revenue comes from 20% of customers, making high-value customer retention critical

Answer

80% of customers will churn within the first 20 days if not contacted

Answer

A retention specialist should spend 80% of their time on calls and 20% on email

Answer

80% of churn is caused by 20% of product defects

Question 2

Which CLV calculation method accounts for the time value of money by discounting future cash flows?

Accepted Answer

Discounted Cash Flow (DCF) CLV Model

Answer

Simple CLV Model

Answer

Historical CLV Model

Answer

Predictive Aggregate CLV Model

Question 3

What does 'gross revenue churn' measure, and how does it differ from net revenue churn?

Accepted Answer

Gross revenue churn measures only revenue lost from cancellations; net revenue churn factors in expansion and contraction from remaining customers

Answer

Gross revenue churn measures total new revenue lost; net revenue churn adds back expansion revenue

Answer

Gross revenue churn includes all revenue types; net revenue churn measures only subscription revenue

Answer

Gross revenue churn is annual; net revenue churn is measured monthly

Question 4

A business has $1,000,000 MRR. It loses $60,000 from churned customers but gains $80,000 in expansion MRR. What is the net revenue churn rate?

Accepted Answer

-2% churn (negative churn)

Answer

6% churn

Answer

2% churn

Answer

8% churn

Question 5

What is a 'customer health score' and what is its primary purpose in churn management?

Accepted Answer

A composite score using behavioral and engagement signals to predict a customer's churn risk

Answer

A survey metric that measures how healthy a company's product offerings are

Answer

A financial metric comparing CLV to CAC to determine account profitability

Answer

A satisfaction score collected during annual business reviews

Question 6

What is the primary goal of a win-back campaign targeting churned customers?

Accepted Answer

To re-engage and reacquire former customers who have previously canceled

Answer

To prevent future customers from churning by advertising retention success stories

Answer

To identify which retention strategies failed and redesign the onboarding process

Answer

To collect exit survey data to improve the product roadmap

Question 7

Which approach best calculates the ROI of a customer retention program?

Accepted Answer

Comparing the CLV of retained customers against the total cost of the retention program

Answer

Dividing total marketing spend by the number of customers retained

Answer

Measuring the percentage increase in NPS scores after the program launches

Answer

Counting the number of customers who responded to retention outreach emails