Customer Acquisition, Retention & Development | 100+ MCQ with Answer
Q1. What is the first step American Airlines takes in its acquisition strategy as per the example?
A. Sending generic offers to all customers
B. Purchasing flight data from airlines
C. Obtaining data from American Express about California residents using AMEX in Japan
D. Surveying its current AAdvantage members
✅ Answer: C. Obtaining data from American Express about California residents using AMEX in Japan
Q2. After obtaining the list from AMEX, what does American Airlines compare it with?
A. A list of all US frequent fliers
B. The list of AAdvantage members flying to Tokyo
C. The list of customers in California
D. A list of other airlines’ customers
✅ Answer: B. The list of AAdvantage members flying to Tokyo
Q3. Who becomes the “premier target” in American Airlines’ acquisition process?
A. Customers already on the AAdvantage list
B. Customers who fly domestically
C. Customers not on the AAdvantage list but in the AMEX list
D. Customers who travel rarely
✅ Answer: C. Customers not on the AAdvantage list but in the AMEX list
Q4. What kind of offers are extended to the targeted prospects?
A. High-price tickets only
B. Attractive offers to try American Airlines
C. Free tickets to all
D. No offers—they are just observed
✅ Answer: B. Attractive offers to try American Airlines
Q5. Which of these is a component of Customer Development in the given text?
A. Ignoring transaction databases
B. Cross-selling to all customers regardless
C. Use of transaction database to identify patterns
D. Only one category of purchase per customer
✅ Answer: C. Use of transaction database to identify patterns
Q6. In Customer Development, what do influencers include?
A. Transaction amounts only
B. Demographics, psychographics, life-events, environmental events
C. Only demographics
D. Only psychographics
✅ Answer: B. Demographics, psychographics, life-events, environmental events
Q7. According to the text, cross-selling as an end in itself is:
A. Always beneficial
B. A bad idea
C. Required for acquisition
D. The only way to boost CLV
✅ Answer: B. A bad idea
Q8. Why can cross-selling sometimes fail to increase customer value?
A. Because it always leads to price wars
B. Because not all cross-selling yields higher customer value
C. Because customers hate multiple offers
D. Because it always reduces loyalty
✅ Answer: B. Because not all cross-selling yields higher customer value
Q9. What is a strategy to improve retention mentioned in the text?
A. Ignoring UX
B. Only focusing on acquisition
C. Management of CS, CX, UX
D. Reducing product quality
✅ Answer: C. Management of CS, CX, UX
Q10. What does “defensive marketing” in retention refer to?
A. Attacking competitor’s customers
B. Promotional giveaways
C. Strategies to defend existing customer base
D. Reducing marketing spend
✅ Answer: C. Strategies to defend existing customer base
Q11. Which is not listed under retention strategies?
A. Be flexible
B. Diversify the approach
C. Track CLV and Lifecycle
D. Focus solely on acquisition
✅ Answer: D. Focus solely on acquisition
Q12. What should be prioritized over acquisition, according to the text?
A. Product innovation
B. Retention
C. Price cutting
D. Mass advertising
✅ Answer: B. Retention
Q13. What does “SOW%” stand for in the text?
A. Share Of Wallet percent
B. Standard Operating Weight
C. Strategy Of Winning
D. Sum Of Warnings
✅ Answer: A. Share Of Wallet percent
Q14. In the formula for SOW%, the denominator represents:
A. The purchases from one category
B. Total wallet or total purchases by customer
C. Number of transactions
D. Gross revenue of company
✅ Answer: B. Total wallet or total purchases by customer
Q15. What is the aim of using the transaction database in Customer Development?
A. To hide customer data
B. To delete inactive customers
C. To identify purchase patterns
D. To anonymize all records
✅ Answer: C. To identify purchase patterns
Q16. What is NOT considered an influencer in the context of customer development?
A. Life-events
B. Environmental events
C. Demographics
D. Raw transaction amount only
✅ Answer: D. Raw transaction amount only
Q17. Which statement best reflects “not all cross-selling results in higher customer value”?
A. Cross-selling always increases short-term sales
B. Cross-selling without alignment may not increase value
C. Cross-selling is useless
D. Cross-selling always reduces cost
✅ Answer: B. Cross-selling without alignment may not increase value
Q18. In retention management, CS stands for:
A. Customer Success or Customer Service
B. Customer Sales
C. Company Strategy
D. Cost Savings
✅ Answer: A. Customer Success or Customer Service
Q19. In retention management, CX stands for:
A. Customer Experience
B. Customer Exchange
C. Company Expansion
D. Cost Excellence
✅ Answer: A. Customer Experience
Q20. In retention management, UX stands for:
A. User Experience
B. User Exchange
C. Unique Experience
D. Unified Expansion
✅ Answer: A. User Experience
Q21. Which of the following is a key factor in retention strategy?
A. Track CLV (Customer Lifetime Value)
B. Ignore lifecycle stages
C. Focus only on acquisition campaigns
D. Reduce customer support
✅ Answer: A. Track CLV (Customer Lifetime Value)
Q22. Why is flexibility important in retention strategy?
A. To adapt to changing customer needs
B. To reduce marketing budget
C. To expand into new countries
D. To avoid customer feedback
✅ Answer: A. To adapt to changing customer needs
Q23. What is the main goal of defensive marketing?
A. To attract new customers only
B. To protect and retain existing customers
C. To increase advertising frequency
D. To eliminate competitors
✅ Answer: B. To protect and retain existing customers
Q24. What does “prioritize retention over acquisition” imply?
A. Focusing more on keeping existing customers than acquiring new ones
B. Ignoring new customers completely
C. Spending more on advertisements than customer support
D. Offering only discounts to new customers
✅ Answer: A. Focusing more on keeping existing customers than acquiring new ones
Q25. What is the role of transaction databases in customer development?
A. To analyze customer buying patterns
B. To track competitors’ sales
C. To store employee performance data
D. To monitor stock prices
✅ Answer: A. To analyze customer buying patterns
Q26. Which of these is true about cross-selling in customer development?
A. All cross-selling always increases CLV
B. Cross-selling should be carefully targeted
C. Cross-selling is irrelevant
D. Cross-selling only works with new customers
✅ Answer: B. Cross-selling should be carefully targeted
Q27. Which of these is NOT a type of customer influencer in development?
A. Demographics
B. Psychographics
C. Life-events
D. Product warranty length
✅ Answer: D. Product warranty length
Q28. What is the benefit of customers purchasing from more categories?
A. Shorter customer life
B. Longer customer life and higher returns (CLV)
C. Less brand loyalty
D. Higher acquisition costs
✅ Answer: B. Longer customer life and higher returns (CLV)
Q29. What does SOW% help a company measure?
A. Total market size
B. Share of wallet captured from a customer
C. Employee productivity
D. Competitor market share
✅ Answer: B. Share of wallet captured from a customer
Q30. Which of the following is NOT a characteristic of successful retention strategy?
A. Sustainable
B. Flexible
C. Targeted
D. Ignoring CLV
✅ Answer: D. Ignoring CLV
Q31. What is the first step in American Airlines’ acquisition approach?
A. Comparing AMEX data with AAdvantage members
B. Sending loyalty emails
C. Offering free upgrades
D. Partnering with hotels
✅ Answer: A. Comparing AMEX data with AAdvantage members
Q32. Why is targeting customers not in the AAdvantage list effective?
A. They already fly with American Airlines
B. They represent potential new loyal customers
C. They are least profitable
D. They are high maintenance
✅ Answer: B. They represent potential new loyal customers
Q33. Which strategy helps in cross-selling effectively?
A. Random product suggestions
B. Educating or informing customers about additional categories
C. Ignoring customer needs
D. Offering every product regardless of relevance
✅ Answer: B. Educating or informing customers about additional categories
Q34. What is the ultimate goal of Customer Development?
A. Maximize short-term revenue only
B. Increase customer lifetime value (CLV)
C. Reduce customer touchpoints
D. Limit cross-selling opportunities
✅ Answer: B. Increase customer lifetime value (CLV)
Q35. In the retention context, why is “tracking lifecycle” important?
A. To ignore older customers
B. To monitor and improve customer engagement over time
C. To replace customer support with AI
D. To avoid offering promotions
✅ Answer: B. To monitor and improve customer engagement over time
Q36. What is a risk of cross-selling without strategy?
A. Increasing CLV
B. Confusing or annoying customers
C. Building customer loyalty
D. Enhancing product awareness
✅ Answer: B. Confusing or annoying customers
Q37. Which of the following best describes American Airlines’ acquisition success?
A. Randomly targeting all travelers
B. Targeting attractive prospects to multiple destinations
C. Ignoring data from partners
D. Offering the same deal to everyone
✅ Answer: B. Targeting attractive prospects to multiple destinations
Q38. Which is true about “mindful campaigns”?
A. One-size-fits-all marketing is effective
B. Campaigns should be tailored to customer segments
C. Only large-scale ads matter
D. They ignore demographics
✅ Answer: B. Campaigns should be tailored to customer segments
Q39. Which of these represents a sustainable retention approach?
A. Flexible targeting based on CLV
B. Ignoring customer preferences
C. Acquiring as many new customers as possible
D. Reducing UX quality
✅ Answer: A. Flexible targeting based on CLV
Q40. What is the connection between CLV and cross-selling?
A. Cross-selling decreases CLV
B. Proper cross-selling increases CLV by encouraging more purchases across categories
C. Cross-selling has no impact on CLV
D. Cross-selling only affects acquisition
✅ Answer: B. Proper cross-selling increases CLV by encouraging more purchases across categories
Q41. What is the main advantage of obtaining partner data in acquisition?
A. It reduces marketing costs
B. It identifies potential customers not yet in the loyalty program
C. It eliminates the need for retention strategies
D. It increases operational complexity
✅ Answer: B. It identifies potential customers not yet in the loyalty program
Q42. Which factor is essential for segmenting customers in Customer Development?
A. Random selection
B. Influencers like demographics, psychographics, and life-events
C. Employee preferences
D. Competitor pricing only
✅ Answer: B. Influencers like demographics, psychographics, and life-events
Q43. Why should cross-selling not be treated as an end in itself?
A. It may annoy customers if not relevant
B. It always reduces revenue
C. It is cheaper than acquisition
D. It works without strategy
✅ Answer: A. It may annoy customers if not relevant
Q44. What is the significance of tracking CLV?
A. To measure employee performance
B. To determine customer lifetime profitability
C. To reduce acquisition costs
D. To create new products only
✅ Answer: B. To determine customer lifetime profitability
Q45. How does American Airlines target “attractive prospects”?
A. By sending standard offers to all travelers
B. By identifying customers outside the AAdvantage program using partner data
C. By ignoring past purchase behavior
D. By offering only loyalty upgrades
✅ Answer: B. By identifying customers outside the AAdvantage program using partner data
Q46. What does “defensive marketing” prevent?
A. Acquisition of new customers
B. Loss of existing customers
C. Product innovation
D. Customer education
✅ Answer: B. Loss of existing customers
Q47. Which of the following is a key component of retention management?
A. Ignoring CS
B. Management of CS, CX, and UX
C. Eliminating loyalty programs
D. Offering discounts only to new customers
✅ Answer: B. Management of CS, CX, and UX
Q48. Which statement is true about Customer Development?
A. It focuses solely on acquisition
B. It uses data to understand purchase patterns
C. It ignores cross-selling
D. It treats all customers the same
✅ Answer: B. It uses data to understand purchase patterns
Q49. Which of these is a potential outcome of effective Customer Development?
A. Lower CLV
B. Higher customer lifetime value
C. Reduced loyalty
D. Increased customer complaints
✅ Answer: B. Higher customer lifetime value
Q50. What is the relationship between SOW% and customer spending?
A. SOW% decreases as customers buy more categories
B. SOW% measures the proportion of a customer’s total spending captured by the company
C. SOW% is unrelated to customer purchases
D. SOW% only measures acquisition efficiency
✅ Answer: B. SOW% measures the proportion of a customer’s total spending captured by the company
Q51. What does a “mindful campaign” involve?
A. Tailored communication based on customer profile and needs
B. Generic mass marketing
C. Ignoring customer preferences
D. Randomized email campaigns
✅ Answer: A. Tailored communication based on customer profile and needs
Q52. Which of the following improves customer retention?
A. Focusing only on acquisition
B. Flexible, diversified, and targeted approaches
C. Ignoring customer lifecycle
D. One-size-fits-all campaigns
✅ Answer: B. Flexible, diversified, and targeted approaches
Q53. Which is true about the use of influencer data?
A. It helps in predicting customer behavior and preferences
B. It is irrelevant to cross-selling
C. It only matters for new customers
D. It is used only in acquisition
✅ Answer: A. It helps in predicting customer behavior and preferences
Q54. Why is prioritizing retention over acquisition strategic?
A. Retention is cheaper and increases long-term value
B. Acquisition is always more expensive
C. Retention eliminates competition
D. Acquisition has no effect on growth
✅ Answer: A. Retention is cheaper and increases long-term value
Q55. What is an example of a retention-focused strategy?
A. Targeting customers already in the loyalty program for personalized offers
B. Randomly sending discounts to all prospects
C. Ignoring existing customer data
D. Increasing advertising spend to attract new customers
✅ Answer: A. Targeting customers already in the loyalty program for personalized offers
Q56. How can cross-selling contribute to higher CLV?
A. By encouraging customers to purchase from more categories
B. By reducing customer engagement
C. By increasing acquisition costs
D. By limiting product exposure
✅ Answer: A. By encouraging customers to purchase from more categories
Q57. Which of the following is NOT part of defensive marketing?
A. Monitoring customer satisfaction
B. Ignoring customer experience
C. Tracking lifecycle and CLV
D. Tailoring retention campaigns
✅ Answer: B. Ignoring customer experience
Q58. Why is data from partners like AMEX valuable?
A. It reduces operational costs
B. It helps identify high-potential prospects outside existing loyalty programs
C. It replaces customer feedback
D. It increases pricing flexibility
✅ Answer: B. It helps identify high-potential prospects outside existing loyalty programs
Q59. What is the potential risk of ignoring UX in retention management?
A. Customers may be dissatisfied and churn
B. Acquisition will improve
C. CLV will automatically increase
D. Cross-selling becomes more effective
✅ Answer: A. Customers may be dissatisfied and churn
Q60. What is the core principle behind SOW% measurement?
A. To track competitors’ wallet share
B. To determine the proportion of a customer’s total spending captured by a company
C. To calculate employee efficiency
D. To measure market size
✅ Answer: B. To determine the proportion of a customer’s total spending captured by a company
Q61. Which of these is a key aspect of retention strategy?
A. Flexible approach based on customer needs
B. Ignoring existing customers
C. One-size-fits-all marketing
D. Only targeting new prospects
✅ Answer: A. Flexible approach based on customer needs
Q62. How does American Airlines identify premier targets for acquisition?
A. By analyzing social media posts
B. By comparing partner data with existing AAdvantage members
C. By sending generic offers to all travelers
D. By focusing only on frequent flyers
✅ Answer: B. By comparing partner data with existing AAdvantage members
Q63. Which factor is crucial when cross-selling to customers?
A. Product relevance to customer needs
B. Offering discounts randomly
C. Targeting only new customers
D. Ignoring purchase history
✅ Answer: A. Product relevance to customer needs
Q64. What is the main purpose of tracking customer lifecycle?
A. To monitor engagement and optimize retention strategies
B. To replace acquisition efforts
C. To reduce marketing spend
D. To prioritize new customers over existing ones
✅ Answer: A. To monitor engagement and optimize retention strategies
Q65. Which approach best increases customer lifetime value?
A. Educating customers and offering cross-category purchases
B. Ignoring customer behavior
C. Offering the same product to everyone
D. Limiting cross-selling to a single category
✅ Answer: A. Educating customers and offering cross-category purchases
Q66. Why is prioritizing retention cost-effective?
A. It costs less than acquiring new customers
B. It eliminates marketing needs
C. It reduces employee workload
D. It decreases customer expectations
✅ Answer: A. It costs less than acquiring new customers
Q67. Which of the following is a benefit of defensive marketing?
A. Reducing churn among existing customers
B. Increasing short-term acquisition only
C. Ignoring customer feedback
D. Limiting product choices
✅ Answer: A. Reducing churn among existing customers
customer acquisition, customer retention, customer development, American Airlines acquisition, AAdvantage program, share of wallet, SOW%, cross-selling strategies, CLV, customer lifetime value, retention management, defensive marketing, transaction database, mindful campaigns, customer influencers, demographics, psychographics, life-events, customer experience, user experience
