Calculating Customer Lifetime Value (CLV) - Quiz

1. Higher customer retention rates generally result in:

Higher CLV

Higher acquisition costs

Lower CLV

No change in CLV

2. CLV primarily helps marketers:

Reduce customer service efforts

Increase immediate sales only

Ignore customer complaints

Target profitable customers effectively

3. Negative Customer Lifetime Value means:

Customer generates losses over time

Customer generates profits immediately

Lower discount rates

High long-term customer retention

4. Which component is NOT typically considered when calculating CLV?

Acquisition cost

Retention rate

Discount rate

Competitor’s market share

5. In the CLV formula, retention rate is expressed as:

A percentage of customers retained annually

Acquisition cost per customer

Customer complaints per year

Annual price discounts

6. If annual margin per customer is $100 and retention rate is 80%, increasing retention rate will:

Increase CLV

Reduce acquisition costs

Not affect CLV

Decrease CLV

7. Acquisition costs in CLV calculations are:

Subtracted from total customer profits

Ignored completely

Added to customer profits

Multiplied by retention rate

8. CLV decreases when:

Customers make repeat purchases

Customers buy premium products

Retention rates improve

Acquisition costs rise without improved retention

9. Retention rate in CLV calculation indicates:

Percentage of new customers

Cost of retaining customers

Immediate revenue from a customer

Percentage of customers retained each year

10. Which of these would increase Customer Lifetime Value?

Increased marketing costs without retention

Frequent price promotions only

Decreasing retention rate

Improving customer satisfaction

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