Customer Care Customer Retention and Loyalty

Question 1

What does 'customer churn' mean?

Accepted Answer

Customers who stop doing business with a company

Answer

Customer churn refers to the rate at which customers end their relationship with a company, a key metric for measuring retention health.

Question 2

Which of the following is a proven strategy for increasing customer loyalty?

Accepted Answer

Consistently exceeding customer expectations through personalized service

Answer

Consistently exceeding expectations — especially through personalization — builds emotional loyalty that price alone cannot create.

Question 3

What is the 'Net Promoter Score' (NPS) designed to measure?

Accepted Answer

The likelihood that customers will recommend the company to others

Answer

NPS measures customer loyalty by asking how likely they are to recommend the company on a scale of 0–10, categorizing respondents as Promoters, Passives, or Detractors.

Question 4

What is a 'loyalty program' designed to accomplish in customer care?

Accepted Answer

Reward high-spending customers to incentivize continued business

Answer

Loyalty programs reward customers for continued engagement, making it more costly for them to switch to a competitor and increasing lifetime value.

Question 5

Which customer type is most valuable to focus retention efforts on?

Accepted Answer

High-value, long-tenure customers who are showing early signs of disengagement

Answer

Retaining high-value, long-tenure customers who show early warning signs of leaving delivers the greatest return because of their established lifetime value.

Customer Care Practice Test

Customer Care Practice Test

Customer Care Customer Retention and Loyalty