Which of the Following Does NOT Describe How Retailers Use

question 44

Multiple Choice

Which of the following does NOT describe how retailers use a customer lifetime value (CLV) ?

• A)CLV is used to identify and cater to the best,more profitable customers.
• B)CLV should be estimated under the assumption that the customer's future purchase behaviors will be the same as they have been in the past.
• C)Sophisticated statistical methods are typically used to estimate the future contributions from past purchases.
• D)An RFM (recency,frequency,monetary)analysis is often used by catalog retailers and direct marketers in estimating their customers' life time value.
• E)A customer who spends $800 twice a year has a higher CLV than a customer that spends $100 each month.

---

Definitions:

Technological Change

Refers to the process of innovation and improvement in technology which leads to new products, services, or more efficient ways of doing things.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing to purchase at that price.

Productivity

The efficiency with which input resources are converted into outputs, often measured as the amount of goods or services produced per unit of input.

Wages

The monetary compensation paid by an employer to an employee in exchange for work performed, often specified in terms of hours, weeks, or tasks completed.