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Business Data Management · End Term · 21 Dec 2025 · September 2025 term

Question 9: An external agency provides you with data on both Custome…

Question 9

+1 markOne correct option

An external agency provides you with data on both Customer Lifetime Value (CLV) and Share of Wallet (SOW) for your retail clients. Customer R shows high CLV (top 5% of your portfolio), but only 20% SOW in the relevant product category. A recent market survey finds the average SOW for your top CLV segment is 55%. (Share of wallet is the percentage of a customer's total spending in a specific product or service category that goes to a particular company.)
What is the most strategic action to maximize future revenue from this customer?

  1. A

    Maintain current strategy—such high CLV likely means this customer’s wallet is already saturated.

  2. B

    Prioritize this customer for targeted cross-selling, because their high CLV and below-average SOW indicates room to grow.

  3. C

    Reduce marketing spend—marketing ROI on high CLV customers tends toward diminishing returns.

  4. D

    Offer broad-based discounts to all top CLV customers to encourage higher SOW.

Show answer

Correct answer

  • B

    Prioritize this customer for targeted cross-selling, because their high CLV and below-average SOW indicates room to grow.

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Question 9 of 50 in the IIT Madras BS Business Data Management (BDM) End Term paper sat on 21 Dec 2025, in the September 2025 term (Business Data Management 18 Dec 25). It carries 1 mark.

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