Calculating Customer Lifetime Value (CLV) - Quiz

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

Acquisition cost per customer

Annual price discounts

Customer complaints per year

A percentage of customers retained annually

2. CLV decreases when:

Retention rates improve

Customers make repeat purchases

Customers buy premium products

Acquisition costs rise without improved retention

3. Retention costs in CLV calculation typically include:

Competitor analysis costs

Customer acquisition activities

Internal employee costs only

Loyalty programs and service expenses

4. Which of these would increase Customer Lifetime Value?

Frequent price promotions only

Increased marketing costs without retention

Improving customer satisfaction

Decreasing retention rate

5. CLV primarily helps marketers:

Ignore customer complaints

Target profitable customers effectively

Reduce customer service efforts

Increase immediate sales only

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

Reduce acquisition costs

Decrease CLV

Not affect CLV

Increase CLV

7. Higher customer retention rates generally result in:

Higher CLV

No change in CLV

Lower CLV

Higher acquisition costs

8. Reducing acquisition costs directly:

Decreases CLV

Has no impact on CLV

Reduces retention rates

Increases CLV

9. Annual customer margin in CLV calculation is:

Acquisition costs plus revenue

Total marketing expenses per customer

Revenue minus retention costs per customer

Revenue minus acquisition cost

10. Which factor directly increases CLV?

Lower customer margins

Higher churn rates

Higher acquisition costs

Higher retention rates

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