Which of the Following Is True About Long-Term Customer Relationships

question 63

Multiple Choice

Which of the following is true about long-term customer relationships?

• A)Referrals are not usually initiated by long-term customers.
• B)On a longer basis, customers tend to become more price-sensitive.
• C)Long-term customers tend to be less inclined to switch.
• D)Cost of customer acquisition occurs after the relationship has been established.

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Definitions:

Cash Coverage Ratio

A financial metric that measures a company's ability to pay off its debt obligations with its cash flow, by comparing its operating cash flow to its total debts.

Days' Sales

Days' Sales, often referred to as Days Sales Outstanding (DSO), measures the average number of days it takes a company to collect payment after a sale has been made.

Receivables Turnover

A financial metric that measures how efficiently a company uses its assets by converting accounts receivable into cash over a period.

Debt-Equity Ratio

A financial ratio that represents the comparative deployment of shareholders' equity and debt in asset financing.