PCM Customer Behavior & Insights 2 — Questions and Answers
Question 1: A customer who purchases a product primarily to signal status to peers is most driven by which type of motivation?
- Utilitarian motivation
- Hedonic motivation
- Conspicuous consumption (Correct answer)
- Cognitive dissonance
Correct answer: Conspicuous consumption
Conspicuous consumption describes buying to signal wealth or status to others rather than for functional utility.
Question 2: Which research method is best suited for uncovering the 'why' behind customer behaviors that respondents may not consciously articulate?
- Online surveys
- Ethnographic research (Correct answer)
- A/B testing
- Sales funnel analysis
Correct answer: Ethnographic research
Ethnographic research observes customers in natural settings, revealing unconscious motivations and behaviors they might not report in surveys.
Question 3: In the context of customer decision-making, what does 'satisficing' mean?
- Maximizing satisfaction by evaluating all options
- Choosing the first option that meets a minimum threshold (Correct answer)
- Delaying purchase until the ideal option appears
- Seeking peer validation before purchasing
Correct answer: Choosing the first option that meets a minimum threshold
Satisficing, coined by Herbert Simon, means selecting the first option that is 'good enough' rather than searching for the optimal solution.
Question 4: A brand launches a loyalty program with points that expire after 90 days. Which behavioral principle does this leverage?
- Loss aversion (Correct answer)
- The endowment effect
- Reciprocity
- Social proof
Correct answer: Loss aversion
Expiring points create a sense of potential loss, leveraging loss aversion to drive purchase behavior before the deadline.
Question 5: Which of the following best describes the concept of 'customer lifetime value' (CLV) in relation to customer behavior insights?
- The total revenue generated by one transaction
- The predicted net profit from the entire future relationship with a customer (Correct answer)
- The average order value across all customers
- The cost to acquire a new customer
Correct answer: The predicted net profit from the entire future relationship with a customer
CLV predicts the total net profit a company expects to earn from a customer over the entire duration of their relationship.
Question 6: A company notices that customers who interact with its chatbot are 40% more likely to convert. This insight is best described as:
- Descriptive analytics (Correct answer)
- Predictive analytics
- Prescriptive analytics
- Diagnostic analytics
Correct answer: Descriptive analytics
Descriptive analytics summarizes historical data to show what has happened, such as identifying a correlation between chatbot use and conversion rates.
Question 7: The 'Jobs-to-Be-Done' framework focuses on understanding customer behavior through:
- Demographic segmentation variables
- The functional, social, and emotional progress customers seek (Correct answer)
- Product feature comparisons against competitors
- Recency, frequency, and monetary value scoring
Correct answer: The functional, social, and emotional progress customers seek
Jobs-to-Be-Done (JTBD) frames customer behavior around the progress people want to make in a given circumstance, encompassing functional, social, and emotional dimensions.
PCM Customer Behavior & Insights 2
A customer who purchases a product primarily to signal status to peers is most driven by which type of motivation?