Chapter 11

Question 1

What are two things that successful database marketing emphasizes?

Answer 1

-identifying customers
-building relationships with them

Question 2

What is the primary benefit of database marketing?

Answer 2

develops long-term relationships with customers

Question 3

What does a marketing database contain?

Answer 3

-customer names, addresses, and email addresses
-customer history (interactions and purchases)
-preferences and profiles
-marketing campaign results

Question 4

A lifetime value analysis creates a figure that represents what?

Answer 4

-represents the profit revenue of a customer throughout the lifetime of a relationship

-key figures: revenue, costs, retention rate, visits or purchases per time period

-A lifetime value analysis informs the company’s customer contact and service personnel regarding a customer’s potential worth to the company.

e.g. A lifetime value figure for a customer segment of $1,375 represents the amount of money, on average, that each customer spends over his or her lifetime.

Question 5

location data tracking

Answer 5

-using informtion collected from GPS to inform marketing decisions, such as which market segments to target

*unlike geo-targeting, location data tracking continuously monitors a person’s movement

e.g. the Phoenix Suns basketball team’s marketers took advantage of the technology to better understand fans who attended games.

Question 6

trawling (with example)

Answer 6

trawling: the process of searching the database for a specific piece of information for marketing purposes

Example: Home Depot’s trawling program locates individuals who have recently moved, so they know who to target for home improvement merchandise

Example: Anniversary dates of a special purchase, such as a new automobile. Car dealerships send a correspondence on each year’s anniversary of a purchase to inquire about customer satisfaction and interest in trading for a newer vehicle.

Question 7

What are typical goals for frequency or loyalty programs?

Answer 7

-maintain or increase sales
-increase loyalty of existing customers
-match a competitor’s offer
-encourage cross-selling
-differentiate the brand
-discourage entry of a new brand

Question 8

What are the 2 primary metrics in customer relationship management (CRM) programs?

Answer 8

1. lifetime value of a customer
2. share of a customer (the percentage of expenditures a customer makes with one particular firm compared to total expenditures in that product’s category- measures a customer’s potential value)