Marketing Advice Customer Acquisition and Retention 2 — Questions and Answers
Question 1: What does NPS (Net Promoter Score) measure?
- The cost of acquiring each new customer
- The likelihood that customers will recommend your brand to others (Correct answer)
- The total revenue generated per customer
- The percentage of customers who cancel their subscription
Correct answer: The likelihood that customers will recommend your brand to others
NPS measures customer loyalty by asking how likely customers are to recommend your brand on a scale of 0–10, categorizing them as Promoters, Passives, or Detractors.
Question 2: A loyalty program that rewards customers with points for each purchase is an example of which retention strategy?
- Win-back campaign
- Gamification
- Transactional loyalty program (Correct answer)
- Customer segmentation
Correct answer: Transactional loyalty program
Transactional loyalty programs reward customers with points or discounts based on purchase behavior, encouraging repeat buying and long-term retention.
Question 3: Which customer retention tactic involves reaching out to customers who have stopped engaging with a brand?
- Cross-selling
- Win-back campaign (Correct answer)
- Lead nurturing
- Referral program
Correct answer: Win-back campaign
Win-back (or re-engagement) campaigns target lapsed customers with special offers or personalized messages to revive their interest in the brand.
Question 4: What is the relationship between CLV and CAC that indicates a healthy business model?
- CAC should be higher than CLV
- CLV should be at least 3x the CAC (Correct answer)
- CLV and CAC should be equal
- CAC should be 5x the CLV
Correct answer: CLV should be at least 3x the CAC
A CLV to CAC ratio of 3:1 or higher is considered a healthy benchmark, meaning the long-term revenue from a customer significantly outweighs the cost to acquire them.
Question 5: Which marketing approach segments customers based on how recently they purchased, how often they buy, and how much they spend?
- Psychographic segmentation
- RFM analysis (Correct answer)
- Demographic targeting
- Behavioral persona mapping
Correct answer: RFM analysis
RFM (Recency, Frequency, Monetary) analysis segments customers based on three dimensions to identify high-value customers and target retention efforts effectively.
Question 6: What is the purpose of a customer success team in a SaaS business?
- To handle billing disputes
- To proactively help customers achieve their goals and reduce churn (Correct answer)
- To run paid advertising campaigns
- To manage product development roadmaps
Correct answer: To proactively help customers achieve their goals and reduce churn
Customer success teams proactively engage with customers to ensure they're getting value from the product, which directly reduces churn and increases retention.
Question 7: Which acquisition channel typically delivers the highest quality leads because prospects actively seek out a solution?
- Cold email outreach
- Display advertising
- Organic search (SEO) (Correct answer)
- Telemarketing
Correct answer: Organic search (SEO)
Organic search delivers high-intent leads because prospects are actively searching for a solution, making them more likely to convert and retain compared to interruptive channels.
Marketing Advice Customer Acquisition and Retention 2
What does NPS (Net Promoter Score) measure?