ESB Customer Relationship Management 2

Question 1

What is 'customer segmentation' in CRM?

Accepted Answer

Dividing customers into groups based on shared characteristics to tailor marketing efforts

Answer

Customer segmentation groups customers by demographics, buying behavior, or needs so businesses can deliver more targeted and effective marketing messages.

Question 2

Which of the following best describes 'customer retention'?

Accepted Answer

Keeping existing customers engaged and continuing to buy

Answer

Customer retention refers to a business's ability to keep its existing customers purchasing over time, which is generally less costly than acquiring new ones.

Question 3

An entrepreneur sends personalized birthday discount emails to customers. This tactic primarily supports which CRM objective?

Accepted Answer

Customer loyalty and engagement

Answer

Personalized outreach like birthday discounts makes customers feel valued, directly supporting loyalty and long-term engagement goals.

Question 4

What is 'churn rate' in a subscription-based small business?

Accepted Answer

The percentage of customers who cancel or stop using the service in a given period

Answer

Churn rate measures the proportion of customers who discontinue a service within a time period, and a high churn rate signals a retention problem.

Question 5

Which type of loyalty program rewards customers based on the total amount they spend over time?

Accepted Answer

Tiered rewards program

Answer

Tiered loyalty programs assign customers to levels (e.g., Silver, Gold, Platinum) based on cumulative spending, incentivizing higher spending to reach better rewards.

ESB - Certified Entrepreneurship and Small Business Specialist Practice Test

ESB - Certified Entrepreneurship and Small Business Specialist Practice Test

ESB Customer Relationship Management 2