Marketing Advice Customer Acquisition and Retention 1

Question 1

Which metric measures the total revenue a business can expect from a single customer over the entire relationship?

Accepted Answer

Customer Lifetime Value (CLV)

Answer

Customer Lifetime Value (CLV) represents the total revenue a business can expect from a single customer account throughout the business relationship.

Question 2

A company spends $50,000 on marketing in a month and acquires 500 new customers. What is the Customer Acquisition Cost (CAC)?

Accepted Answer

$100

Answer

CAC is calculated by dividing total marketing spend ($50,000) by the number of new customers acquired (500), which equals $100.

Question 3

Which strategy focuses on increasing revenue from existing customers rather than acquiring new ones?

Accepted Answer

Customer expansion

Answer

Customer expansion strategies—such as upselling and cross-selling—target existing customers to increase their spend, boosting revenue without the cost of new acquisition.

Question 4

What does a high customer churn rate indicate for a business?

Accepted Answer

Customers are leaving faster than they are being retained

Answer

A high churn rate means a large percentage of customers are discontinuing their relationship with the business, signaling poor retention.

Question 5

Which of the following is the most cost-effective approach to growing a business according to marketing best practices?

Accepted Answer

Retaining existing customers

Answer

Retaining existing customers is widely considered more cost-effective because acquiring new customers typically costs 5–7x more than keeping current ones.

Marketing Advice Practice Test

Marketing Advice Practice Test

Marketing Advice Customer Acquisition and Retention 1