For What Reason Would the Customer Pyramid Be More Appropriate

question 12

Multiple Choice

For what reason would the customer pyramid be more appropriate in identifying customer's life time value than utilizing the traditional 80-20 rule?

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

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Definitions:

Covering Law

In the philosophy of science, a general law that 'covers' or explains a set of phenomena, making them predictable and understandable.

Normative Principle

A standard or rule that guides ethical or moral behavior, prescribing how individuals ought to act in given situations.

Electronic Commerce Transactions

Refers to the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the internet.