Winning Companies Improve the Value of Their Customer Base by Excelling

question 43

Multiple Choice

Winning companies improve the value of their customer base by excelling at each of the following strategies EXCEPT ________.

• A) retaining all customers regardless of profitability
• B) reducing the rate of customer defection
• C) increasing the longevity of the customer relationship
• D) making low-profit customers more profitable or terminating them
• E) focusing disproportionate efforts on high-value customers

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Definitions:

Fair Value Enterprise Method

A method of valuing a business by estimating the price at which the entire enterprise could be sold in a current market transaction.

Share Issuance

The process by which a company distributes new shares to investors, thereby raising capital.

Market Price

The current price at which an asset or service can be bought or sold.

Fair Market Value

The price at which an asset would be exchanged between a willing buyer and seller, each having reasonable knowledge of all the relevant facts.