A. A well-designed customer loyalty program can increase the number of a company's loyal
customers by as much as 80 percent.
B. About 20 percent of any given company's most profitable customers are likely to be its
competitors’ most profitable customers as well.
C. It is unreasonable to expect more than 20 percent of customers to be 100 percent loyal
to any particular brand of product.
D. Even “loyal” customers cannot reasonably be expected to stick to one particular brand of
product more than 80 percent of the time.
E. A relatively small number of loyal customers is responsible for about 80 percent of a
company's profits.
PREP2012-Pack1-RC-004-05 VRC000108-05 Medium The second paragraph functions primarily to
A. propose solutions to certain problems inherent in customer loyalty programs
B. emphasize certain risks inherent in customer loyalty programs
C. address certain contentions put forth by advocates of customer loyalty programs
D. defend certain specific aspects of customer loyalty programs against criticism
E. reconcile competing viewpoints regarding the of customer loyalty programs
PREP2012-Pack1-RC-004-06 VRC000108-07 Medium
The author of the passage suggests that which of the following is most likely to be true of a customer who is exclusively loyal to a particular brand of product?
A. The customer probably began buying that brand of product only within the past year.
B. The customer is probably among the most profitable customers for the company that
manufactures that brand of product.
C. The customer is probably not a heavy consumer of that particular type of product.
D. The customer is probably a loyal customer when purchasing other types of products as
well.
E. The customer probably sampled numerous brands of that type of product before
becoming loyal to a particular brand.
PREP2012-Pack1-RC-005
Many managers are influenced by dangerous myths about pay that lead to counterproductive decisions about how their companies compensate employees. One such myth is that labor rates, the rate per hour paid to workers, are identical with labor costs, the money spent on labor in relation to the productivity of the labor force. This myth leads to the assumption that a company can simply lower its labor costs by cutting wages. But labor costs and labor rates are not in fact the same: one company could pay its workers considerably more than another and yet have lower labor costs if that company's productivity were higher due to the talent of its workforce, the efficiency of its work processes, or other factors. The confusion of costs with rates persists partly because labor rates are a convenient target for managers who want