Final Exam – Course 113

Congratulations on completing all the necessary courses. The final step to becoming a Certified Loyalty Marketing Professional (CLMP) is to utilize the skills learned to date and test this learned knowledge in a final exam.

As Step 1 of this exam, we require you to complete the following Questionnaire. There are twenty-two (22) multiple choice questions. We require sixteen (16) correct answers for you to pass the exam. We will advise of any incorrectly answered questions. In any instances of a failed exam (less than 16 correct), we will request courses be completed for the applicable incorrect responses. Once those courses completed, you may complete the questionnaire again and resubmit via email.

Following the Questionnaire component of the exam, you will complete the financial tool by downloading an Excel sheet and using a real-life case study to define the financial elements that drive the Return on Investment (ROI) of a Loyalty Program.

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Thank you for submitting your questionnaire. This is Step 1 of your CLMP Final Exam. Once we have received and graded your Case Study ROI response, we will inform you of your total final score.

To complete the Case Study ROI Model, download the Excel Workbook HERE.

Use the real-life case study to define the financial elements that drive the Return on Investment (ROI) of a Loyalty Program. The case study involves a Retailer who is battling bigger and larger competition, a phenomenon that exists today in all global markets. Please review the case study and input the pertinent data in the ROI Model tab. Some data has been pre-populated from the case study (highlighted in green). The data that remains to be input is based on your financial expectations for a loyalty program if you were the responsible for the program (highlighted in blue). Once completed, you should achieve an ROI greater than 50%. This particular tab must be completed to pass but will not be marked towards your correct or incorrect total.

Once you complete the ROI model in the Excel document, save your results and upload them in the next section. Click “Mark Complete” to continue.

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Question 1 of 22

1. Question

1) Loyalty Marketing is managed within a company’s existing Marketing Resources.

True – Marketing has the expertise to manage all aspects of a company’s marketing efforts, including Loyalty Marketing
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False – Loyalty Marketing is an established discipline requiring dedicated resources
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Question 2 of 22

2. Question

2) What is one of the primary goals for a company to launch a Loyalty Marketing Program?

Loyalty Marketing Programs focus on reducing margin
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Loyalty Marketing Programs focus on creating a more effective supply channel
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Loyalty Marketing Programs focus on relationship building to create an emotional connection to the brand
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All of the above
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Question 3 of 22

3. Question

3) How does Loyalty Marketing connect with the Customer?

Loyalty Marketing Programs reduce purchasing costs for the Customer
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Loyalty Marketing Programs use classic human behavioral theory to create an emotional connection to the brand
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Loyalty Marketing Programs create more purchase options for customers through an increased supply channel
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All of the above
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Question 4 of 22

4. Question

4) What are the best practices for an effective Loyalty Program?

Define and measure program objectives
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Create a strategic and brand complimentary program business model
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Structure a successful and balanced value proposition
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Effectively segment customer/member profiles
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Offer a spectrum of rewards
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Effectively target customers/members for tiering and funding rates
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Create personalized communications
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Enable ongoing member engagement
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Loyalty programs must evolve to survive and thrive
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All of the above
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Question 5 of 22

5. Question

5) What is the best process to begin a Loyalty Program design?

Start with financials
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Start with the technology available
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Start with company/brand objectives
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All of the above
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Question 6 of 22

6. Question

6) What are the key components of a financially viable Loyalty Program?

Identify specific behaviors to reach your financial goals
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Create a blended value proposition
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Monetize specific client behaviors that will help you reach your financial goals
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Plan to achieve a sustainable Loyalty Program
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Use a financial modeling tool to understand program costs and benefits
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All of the above
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Question 7 of 22

7. Question

7) Identify/match the three (3) strategic Loyalty Program Business Models (Proprietary, Coalition, Player) with how each Program is managed:

Sort elements

Player
Proprietary
Coalition

Company/brand do not own or manage the program and instead purchase/offer program currency from another company/brand.

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Company/brand own and manage the program, including any participating partners in the program.

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Shared ownership with other brands and a third party owns and manages the program

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Question 8 of 22

8. Question

8) Which of the three (3) Loyalty Program Business Models would benefit from partnership participation?

Proprietary
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Coalition
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Player
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All of the above
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Question 9 of 22

9. Question

9) Which of the three (3) Loyalty Program Business Models result in the Company/Brand carrying the liability costs for the Loyalty Program?

Proprietary
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Coalition
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Player
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All of the above
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Question 10 of 22

10. Question

10) The Loyalty Business Model selected impacts program design, as well as the following?

Ensuring there is a balanced value proposition (hard and soft benefits)
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Deploying a flexible funding rate
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Segmenting the customer base with differing earn, bonus and/or redeem funding rate(s)
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Ensuring the earn velocity matches the segmented customer base
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All of the above
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Question 11 of 22

11. Question

11) Select the one item below that is NOT an example of a Hard Benefit:

Economic/tangible benefits
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Promotional currency
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Special Program Status
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Instant rewards
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Sweepstakes entries
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Tangible Experiences
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Question 12 of 22

12. Question

12) Select the one item below that is NOT an example of a Soft Benefit:

Special Program Status
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Intangible benefit
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Exclusive access
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Special privileges
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Economic benefits
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Intangible Experiences
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Question 13 of 22

13. Question

13) Select the one item below that should NOT be a factor when developing the Program strategy:

Define a strategy which considers the Company/Brand’s top ten success factors
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Create effective KPIs and continually measure and report against these KPIs
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Define a strategy which encompasses “barriers to exit”
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Define a strategy which recognizes and delivers value to best customers
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Define a strategy which establishes emotional loyalty to the Company/Brand
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Define a strategy that is difficult for competitors to replicate
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Define a strategy that delivers low value to the Company/Brand
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Question 14 of 22

14. Question

14) Rewards strategy is a blend of art and science and requires all considerations below. Select the one consideration that does NOT apply:

Follow best practices in segmentation and set funding rates with a keen eye on velocity
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There must be a high value travel option
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Know all of your options and evaluate each systematically
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Offer a strategic spectrum of rewards
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Don’t be afraid to try something new
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Execute flawlessly
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Measure everything when it comes to redemptions
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Implement a flexible funding rate
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Question 15 of 22

15. Question

15) Select the one item below that is NOT a best practice for effective data management:

Enable data gathering from any source as long as the data is considered useful
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Understand and evaluate your data sources
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Collect only the data you’ll use, and use the data that you collect
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Segmentation is the core foundation of all analytical efforts
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Ensure accuracy of data sources as Members’ data is often incomplete at the time of registration/program initiation
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Implement data hygiene practices to periodically cleanse the database; especially contact fields known to be inaccurate
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Data that is ever changing – Continually improve operational reporting but keep it simple
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Question 16 of 22

16. Question

16) How do you determine the Members providing the best value to the Company/Brand and/or have the potential to increase their value?

Create analytics which lead to insight as insights leads to customer strategy evolution
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Create analytics to estimate the value and potential associated with each segment
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Create analytics to understand retention and attrition of members
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All of the above
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Question 17 of 22

17. Question

17) Select the one item below that is NOT a best practice for enabling the best technology infrastructure:

Utilize the lowest cost technology to reduce Program costs
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Define and match the Program objectives, strategy program management requirements against the available technology infrastructure
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Utilize in-house or outsourced technology resources when considering current or future gaps or trends to continually evolve (i.e. Internet of things)
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Loyalty Management System should provide rich and actionable data, business intelligence and member insights
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Technology must provide the ability to send targeted/personalized promotions and offers
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Increasing Mobile capabilities
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Question 18 of 22

18. Question

18) Operational Management to support effective Company/Brand Program strategy requires the following (select all that apply):

Evaluate the best operational approach for your program and organizational structure
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Assess your Program needs against internal and external capabilities
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Planning discipline and launch activities are essential to a successful launch
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Plan ongoing operational support and resources/tools to constantly evolve
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Focus on the member experience at all times
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All of the above
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Question 19 of 22

19. Question

19) Loyalty Marketing communication is a different discipline from other Company/Brand communication:

True – Loyalty Marketing communication requires expertise to specifically support the program using narrowcast channels and permission-based media. Loyalty Marketing communication is aimed at behavioral and individually target audiences which are focused on customer retention and increased yield per customer using two-way, dialog driven communications
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False – Loyalty Marketing communication can be managed similar to “brand” communication which typically uses mass media focused on customer acquisition, brand image and differentiation versus competition using one-way push communication
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Question 20 of 22

20. Question

20) Select the one item below that is NOT a key component of effective Loyalty Marketing communication strategy and execution:

Plan, budget and measure
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Customer Loyalty value proposition should include specific Customer Engagement objectives
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Utilize the highest cost communication channel(s)
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Version everything based on segment/targeted messaging
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Be responsible to Customers/Members
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Allocate marketing spend against high-return segments
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Practice dialogue driven approaches with solid listening posts
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Encourage dialogue and program engagement
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Be creative and have fun
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Question 21 of 22

21. Question

21) Select the one item below that would NOT be the expected outcome when executing effective Loyalty Marketing Communication:

Retention of the highest value clientele to relieve dependency on acquisition
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Customer engagement has not led to Customer Loyalty
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Less churn of existing customers
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Increase in share of wallet – Same customers, same frequency, but higher spend at the expense of competing merchants
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Increase frequency – Same customers, same average tickets, but higher frequency of visits which increases Customers’ value over time
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Question 22 of 22

22. Question

22) Member Care for Loyalty Marketing should encompass the following (select all that apply):

Launch/update Member Care support for all program needs
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Effective metrics and reporting to track member requests, concern and feedback
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Regularly review emerging Customer/Member and industry trends
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Have operationally effective, well trained and motivated teams using technologically advanced and ever evolving systems
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