CSM Customer Relationship Management & Retention 3 — Questions and Answers
Question 1: A sales manager wants to reduce customer churn by identifying at-risk accounts before renewal. Which CRM capability is MOST useful for this purpose?
- Automated invoice generation
- Predictive churn scoring using behavioral data (Correct answer)
- Social media scheduling tools
- Email newsletter templates
Correct answer: Predictive churn scoring using behavioral data
Predictive churn scoring analyzes usage and engagement data to flag at-risk accounts so sales teams can intervene proactively.
Question 2: In the context of CRM, what does 'customer segmentation' allow a sales manager to do?
- Delete inactive customer records automatically
- Tailor messaging and offers to specific groups based on shared characteristics (Correct answer)
- Assign all accounts to a single sales representative
- Generate financial statements by product line
Correct answer: Tailor messaging and offers to specific groups based on shared characteristics
Segmentation groups customers by attributes such as industry, size, or behavior, enabling personalized and relevant communication.
Question 3: Which of the following best describes a 'land and expand' CRM strategy?
- Acquiring a competitor to grow market share
- Closing a small initial deal and growing the account through upsells and cross-sells (Correct answer)
- Focusing exclusively on enterprise-level accounts
- Reducing territory size to improve rep efficiency
Correct answer: Closing a small initial deal and growing the account through upsells and cross-sells
Land and expand involves winning a modest initial contract, then growing account revenue by expanding usage or adding products over time.
Question 4: A sales manager is reviewing CRM data and finds that the top 20% of customers generate 80% of revenue. This observation reflects which principle?
- The Law of Diminishing Returns
- The Pareto Principle (Correct answer)
- The Net Promoter Framework
- The Customer Effort Score model
Correct answer: The Pareto Principle
The Pareto Principle (80/20 rule) commonly applies in sales, where a small segment of customers drives the majority of revenue.
Question 5: Which action best demonstrates proactive CRM in a sales context?
- Waiting for customers to report problems before contacting them
- Scheduling regular check-ins to review customer goals and usage health (Correct answer)
- Sending automated invoices at contract renewal
- Processing refund requests within 48 hours
Correct answer: Scheduling regular check-ins to review customer goals and usage health
Proactive CRM means anticipating customer needs and reaching out before issues arise, rather than reacting to problems.
Question 6: When a customer agrees to provide a public testimonial or case study, they are demonstrating which stage of the customer lifecycle?
- Awareness
- Consideration
- Advocacy (Correct answer)
- Onboarding
Correct answer: Advocacy
Advocacy is the stage where satisfied customers actively promote the company, providing testimonials, referrals, and case studies.
Question 7: A sales manager wants to improve customer satisfaction scores after implementation. The MOST effective immediate action is:
- Offering a discount on the next renewal
- Conducting a structured onboarding review to address early friction points (Correct answer)
- Replacing the account executive
- Sending a satisfaction survey without follow-up
Correct answer: Conducting a structured onboarding review to address early friction points
A structured onboarding review identifies and resolves friction early, setting the foundation for long-term satisfaction and retention.
CSM Customer Relationship Management & Retention 3
A sales manager wants to reduce customer churn by identifying at-risk accounts before renewal.
Which CRM capability is MOST useful for this purpose?