After Calculating the CLV of Its Customers, American Auto Supplies

question 32

Multiple Choice

After calculating the CLV of its customers, American Auto Supplies identified its most profitable customers and also found that a significant percentage of its customers are unprofitable. Which of the following actions would American Auto Supplies most likely take based on these findings?

• A) fire its unprofitable customers
• B) offer the highest level of customer service to its unprofitable customers
• C) encourage unprofitable customers to become product champions
• D) discontinue discounts for all but its most profitable customers
• E) provide slightly lower levels of customer service to its most profitable customers

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Definitions:

Aggregate Demand

The total demand for all goods and services within an economy at a given overall price level and time.

Hyperinflation

Extremely high and typically accelerating inflation, drastically eroding the real value of the local currency.

Real Interest Rate

is the interest rate adjusted for the effects of inflation, representing the true cost of borrowing and the real yield to investors.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual percentage rate.