Why Would the Customer Pyramid Be More Appropriate in Identifying

question 24

Multiple Choice

Why would the customer pyramid be more appropriate in identifying a customer's lifetime value than utilizing the traditional 80-20 rule?

• A) The 80-20 rule doesn't recognize the behavior of 20 percent of the customers.
• B) The 80-20 rule focuses only on the value of 80 percent of the shoppers.
• C) Customers can more easily identify where they would be located in the customer pyramid than within the 80-20 rule.
• D) If shoppers only buy 20 percent of the time, retailers have a missed sale 80 percent of the time.
• E) The 80-20 rule does not consider important differences among the 80 percent of customers in the "rest" segment.

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Definitions:

Common Experiences

Common experiences refer to events or situations that are shared by a large number of people, leading to a sense of community or understanding among those who have undergone similar circumstances.

Consequence

The outcome or result that naturally follows an action, inaction, or occurrence.

Generation

A group of individuals born and living contemporaneously, sharing similar social, cultural, and economic circumstances.

Adaption

The process by which organisms adjust to new environments or changes in their current environment.