MO Marketing Officer Budget & Financial Management 2

Question 1

A marketing officer calculates the average revenue generated by a customer over their entire relationship with the company. What metric is this?

Accepted Answer

Customer lifetime value

Answer

Customer lifetime value (CLV) measures the total revenue a business can expect from a single customer account over the duration of their relationship.

Question 2

If a company spends $100,000 to acquire 500 new customers, what is the Customer Acquisition Cost (CAC)?

Accepted Answer

$200

Answer

CAC = Total acquisition spend / Number of new customers = $100,000 / 500 = $200.

Question 3

Which financial ratio compares customer lifetime value to customer acquisition cost to evaluate marketing efficiency?

Accepted Answer

CLV:CAC ratio

Answer

The CLV:CAC ratio indicates whether the long-term revenue from a customer justifies the cost to acquire them; a ratio of 3:1 or higher is generally healthy.

Question 4

A marketing officer is evaluating whether to invest in a new marketing technology platform. Which financial analysis method calculates the time it takes to recover the initial investment?

Accepted Answer

Payback period analysis

Answer

Payback period analysis determines how long it will take for returns from an investment to equal its initial cost.

Question 5

A campaign costs $20,000 and the product has a contribution margin of $40 per unit. How many units must be sold to break even on the campaign?

Accepted Answer

500 units

Answer

Break-even units = Fixed campaign cost / Contribution margin per unit = $20,000 / $40 = 500 units.

(MO) Marketing Officer Certification Practice Test

(MO) Marketing Officer Certification Practice Test

MO Marketing Officer Budget & Financial Management 2