Club Membership Programs That Are Open to Everyone Who Purchases

question 38

Multiple Choice

Club membership programs that are open to everyone who purchases a product or service ________.

• A) are more powerful long-term loyalty builders than limited-membership clubs
• B) will not help a company attract customers from competitors
• C) prevent those with only a fleeting interest in a company's products from joining
• D) are useful for building a database of customers but are not very good as long-term loyalty builders
• E) are useless unless there are fees and membership conditions

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Definitions:

Depreciation

The method of allocating the cost of a tangible or physical asset over its useful life.

Royalties

Payments made to owners of intellectual property, like patents or copyrights, in exchange for usage rights.

Form 1099-MISC

A document used to report miscellaneous income such as payments made to independent contractors, rent, or awards.

Payer

An entity or individual who makes a payment to another.