CCRS Retention Strategies & Loyalty Programs 3

Question 1

Which segmentation approach identifies customers most likely to churn based on recency, frequency, and monetary value of transactions?

Accepted Answer

RFM analysis

Answer

RFM (Recency, Frequency, Monetary) analysis scores customers on three behavioral dimensions to predict retention risk and value.

Question 2

A telecom company offers customers a $100 bill credit if they stay for 12 more months. This is an example of:

Accepted Answer

Contractual lock-in with financial incentive

Answer

Offering a future financial reward contingent on staying creates contractual commitment backed by monetary incentive.

Question 3

In a points-based loyalty program, what is 'breakage'?

Accepted Answer

Points earned but never redeemed by customers

Answer

Breakage refers to points or rewards that expire or go unused, which represents program liability that never converts to a cost.

Question 4

A company discovers customers who use three or more product features have 70% lower churn. The best action is to:

Accepted Answer

Create onboarding flows that guide all new customers to adopt three or more features

Answer

Guiding customers to the feature adoption threshold associated with retention directly reduces churn at scale.

Question 5

What distinguishes 'attitudinal loyalty' from 'behavioral loyalty' in customer retention?

Accepted Answer

Attitudinal loyalty reflects emotional commitment; behavioral loyalty reflects habitual repurchase patterns

Answer

Attitudinal loyalty is a positive emotional attachment to a brand, while behavioral loyalty is simply repeat purchasing regardless of sentiment.

(CCRS) Certified Customer Retention Specialist Practice Test