eCommerce Marketing Customer Retention and Loyalty Programs for eCommerce 1 — Questions and Answers
Question 1: What metric measures the percentage of customers who return to make a repeat purchase within a specific period?
- Repeat Purchase Rate (Correct answer)
- Customer Acquisition Cost
- Bounce Rate
- Return on Ad Spend
Correct answer: Repeat Purchase Rate
Repeat Purchase Rate tracks what percentage of customers come back to buy again, directly measuring how well a store retains its customer base.
Question 2: Which type of loyalty program segments customers into levels based on their cumulative spending thresholds?
- Points-based program
- Cashback program
- Tiered loyalty program (Correct answer)
- Coalition loyalty program
Correct answer: Tiered loyalty program
Tiered loyalty programs (e.g., Silver, Gold, Platinum) reward customers at different benefit levels based on how much they've spent in total, incentivizing higher spending.
Question 3: What is the primary goal of a post-purchase email sequence in an eCommerce retention strategy?
- Acquiring new customers through paid referrals
- Nurturing customer relationships to encourage repeat purchases (Correct answer)
- Promoting flash sales to general audiences
- Collecting payment data for future one-click orders
Correct answer: Nurturing customer relationships to encourage repeat purchases
Post-purchase email sequences nurture the customer relationship after a sale — providing order updates, product tips, and related suggestions — to drive repeat business.
Question 4: Which formula correctly calculates Customer Lifetime Value (CLV)?
- CLV = (Average Order Value × Purchase Frequency) / Churn Rate (Correct answer)
- CLV = Total Revenue / Number of Customers
- CLV = Customer Acquisition Cost × Retention Rate
- CLV = Average Order Value / Customer Acquisition Cost
Correct answer: CLV = (Average Order Value × Purchase Frequency) / Churn Rate
CLV is calculated by dividing the product of Average Order Value and Purchase Frequency by the Churn Rate, representing total expected revenue from a customer over their lifetime.
Question 5: What does 'customer churn rate' measure in eCommerce?
- The rate at which new customers are acquired
- The percentage of customers who stop purchasing during a given period (Correct answer)
- The average number of items returned per order
- The speed at which customers complete the checkout process
Correct answer: The percentage of customers who stop purchasing during a given period
Churn rate measures the percentage of customers who stop buying from you during a specific timeframe, indicating how well you're retaining your existing customer base.
Question 6: Which retention strategy involves identifying and providing exclusive benefits to a store's highest-spending customers?
- Affiliate marketing
- Retargeting ad campaigns
- VIP or tiered loyalty programs (Correct answer)
- Cold email outreach
Correct answer: VIP or tiered loyalty programs
VIP or tiered loyalty programs identify top-spending customers and reward them with exclusive perks, early access, and personalized treatment to deepen brand loyalty.
Question 7: According to email marketing best practices, when should a 'win-back' email campaign begin for lapsed eCommerce customers?
- 1-7 days after last purchase
- 30-90 days after last purchase (Correct answer)
- 6-12 months after last purchase
- Immediately after account creation
Correct answer: 30-90 days after last purchase
Win-back campaigns are most effective 30-90 days after a customer's last purchase, when the customer still has brand awareness but needs re-engagement before going completely inactive.
eCommerce Marketing Customer Retention and Loyalty Programs for eCommerce 1
What metric measures the percentage of customers who return to make a repeat purchase within a specific period?