Customer Profitability Analysis Quiz

What does customer profitability refer to?

• The expenses incurred to serve a customer

• The profit generated per customer

• The number of customers a business has

• The total revenue generated by a business

What is the formula for calculating annual profit per customer?

• Total revenue - Total expenses

• Total revenue + Total expenses

• Total revenue / Total expenses

• Total revenue x Total expenses

Which of the following is NOT a source of expenses considered in customer profitability?

• Sales revenue

• Operational cost

• Loyalty perks

• Cost of customer service

What does CPA stand for in the context of customer profitability?

• Customer Purchase Analysis

• Customer Profitability Assessment

• Customer Profit Analysis

• Customer Profitability Analysis

Which customer is more profitable based on the example provided?

• Customer A

• Customer B

• Neither customer is profitable

• Both customers are equally profitable

What is the first step in customer profitability analysis?

• Define your customer groups

• Find the data

• Define your customer costs

• Put it all together

What does RFM stand for in customer segmentation?

• Recency, Frequency, Monetary

• Recency, Financial, Management

• Revenue, Frequency, Monetary

• Revenue, Frequency, Management

Which of the following is a direct cost in customer profitability?

• Marketing costs

• Shipping costs

• Customer service contact costs

• Cost of goods sold

What is the purpose of customer profitability analysis?

• To determine the overall profit a customer generates

• To reduce operational costs

• To improve product quality

• To increase the number of customers

In the example provided, what was Alice's profit?

• $700

• $1,500

• $2,500

• $5,000