ESB ESB - Entrepreneurship and Small Business Sales Strategies and Revenue Generation Questions and Answers 2 — Questions and Answers
Question 1: What is a 'lead' in the sales process?
- A confirmed purchase order received from a new first-time customer
- A potential customer who has expressed some level of interest in a product or service (Correct answer)
- A returning customer with an established purchase history and account
- A senior sales team manager responsible for mentoring and closing deals
Correct answer: A potential customer who has expressed some level of interest in a product or service
A lead is a prospect who has shown interest in what you offer and may potentially become a paying customer after further qualification.
Question 2: What is 'cost-plus pricing'?
- Setting prices based on what direct competitors are currently charging in the market
- Adding a standard profit markup percentage to the total cost of producing a product (Correct answer)
- Pricing based on the perceived value customers assign to the product or experience
- Charging different prices to different customer segments based on their willingness to pay
Correct answer: Adding a standard profit markup percentage to the total cost of producing a product
Cost-plus pricing calculates total production cost per unit and adds a desired profit margin percentage to arrive at the selling price.
Question 3: What does Customer Lifetime Value (CLV) measure?
- The average number of years a typical customer remains active with a business
- The total revenue a business expects to generate from a customer over the entire relationship (Correct answer)
- The total cost to acquire a single new customer through all marketing channels
- The average number of products a customer buys during a single shopping visit
Correct answer: The total revenue a business expects to generate from a customer over the entire relationship
CLV helps businesses understand each customer's long-term worth, guiding how much to invest in acquisition, retention, and service.
Question 4: What is the purpose of a 'call to action' (CTA) in sales and marketing?
- To schedule a recurring internal sales team performance review meeting
- To prompt the prospect or customer to take a specific next step toward purchasing (Correct answer)
- To document and report sales performance metrics to company leadership
- To analyze competitor pricing strategies and market positioning data
Correct answer: To prompt the prospect or customer to take a specific next step toward purchasing
A CTA directs customers to take a specific action like 'Buy Now,' 'Get a Free Quote,' or 'Schedule a Demo' to advance them toward a sale.
Question 5: What does 'price elasticity' measure in a business context?
- The flexibility of payment terms and financing options offered to customers
- How sensitive customer demand is to changes in the price of a product (Correct answer)
- A company's operational ability to adjust prices in response to rising production costs
- The discount percentage rates offered to customers during promotional sale events
Correct answer: How sensitive customer demand is to changes in the price of a product
Price elasticity measures how much demand changes when price increases or decreases, helping businesses set pricing that maximizes revenue.
Question 6: What does 'closing a sale' mean in the sales process?
- Shutting down a sales operation or territory at the end of a fiscal quarter
- Securing the customer's final commitment to purchase and completing the transaction (Correct answer)
- Formally ending the sales relationship with a consistently non-converting prospect
- Processing customer refunds and returns from dissatisfied or returning buyers
Correct answer: Securing the customer's final commitment to purchase and completing the transaction
Closing is the critical final step where the salesperson confirms the customer's agreement to buy and ensures the deal is completed.
ESB ESB - Entrepreneurship and Small Business Sales Strategies and Revenue Generation Questions and Answers 2
What is a 'lead' in the sales process?