ACCA Performance Management (F5) Certification Practice Exam

What is a benefit of using Big Data for customer relationship management (CRM)?

1. Increased product pricing

2. Improved customer loyalty

3. Enhanced employee productivity

4. Faster market entry

The correct answer is: Improved customer loyalty

Using Big Data for customer relationship management (CRM) significantly enhances customer loyalty. This is primarily because Big Data enables organizations to gather, analyze, and utilize vast amounts of customer information, which can lead to more personalized and targeted interactions. When a business understands its customers better—through preferences, behaviors, and feedback—it can tailor its offerings and communications to meet their specific needs and desires. This personalized approach fosters stronger connections with customers, as they feel understood and valued, which increases their likelihood of remaining loyal to the brand. Additionally, insights derived from Big Data can help organizations anticipate customer needs, leading to proactive service and engagement strategies that further enhance loyalty. While other options such as increased product pricing, enhanced employee productivity, and faster market entry might relate to different aspects of Big Data's impact on a business, they do not directly address the core relationship between understanding customer data and fostering loyalty in customer relationships as effectively as improved customer loyalty does.