IS Performance Measurement & KPIs 3

Question 1

Which of the following is the correct formula for calculating Customer Lifetime Value (CLV)?

Accepted Answer

Average purchase value × purchase frequency × average customer lifespan

Answer

CLV = average purchase value × purchase frequency × average customer lifespan, representing the total revenue expected from a customer.

Question 2

A sales leader notices that conversion rates are high early in the funnel but drop sharply at the proposal stage. What should they analyze?

Accepted Answer

The quality and relevance of proposals being sent

Answer

A drop at the proposal stage indicates the proposal content, pricing, or timing may not be aligned with prospect needs.

Question 3

What is the primary purpose of tracking 'quota attainment' at the individual rep level?

Accepted Answer

To identify top performers, coaching needs, and forecast accuracy

Answer

Individual quota attainment reveals performance gaps, informs coaching decisions, and validates whether quotas are set appropriately.

Question 4

When tracking KPIs, what does 'leading indicator' mean in an inbound sales context?

Accepted Answer

A metric that predicts future performance based on current activity

Answer

Leading indicators like call volume and demos scheduled predict future revenue, allowing managers to course-correct before the period ends.

Question 5

A sales team's MRR grew 15% but churn rate also increased from 3% to 7%. What is the correct interpretation?

Accepted Answer

New revenue growth may be masking a retention problem that threatens long-term MRR

Answer

Rising churn erodes the base of recurring revenue, meaning the team must sell even faster just to maintain MRR, signaling a sustainability risk.

(IS) Inbound Sales Certification Practice Test