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chapter

16

Customer Metrics

McGraw-Hill/Irwin 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.

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Customer Metrics Todays

Objectives

Objectives will be to:

Understand the strengths and weaknesses of traditional offline

metrics

Understand the strengths and weaknesses of online metrics

Discuss the need for an integrated set of metrics

Examine eBays customer metrics

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Offline Customer Metrics

Online Customer Metrics

The Need for Integrated Customer Metrics

EBays Customer Metrics

Conclusion

Chapter 16: Customer Metrics

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Chapter 16: Customer Metrics

Offline Customer Metrics

Online Customer Metrics

The Need for Integrated Customer Metrics

EBays Customer Metrics

Conclusion

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Exhibit 16.2: Traditional Hierarchy-of-

Effects Model

Purchase

I am aware of Amazon

I know what products Amazon carries

I know Amazon vs. BN.com

Quality of customer service interactions

Satisfaction with Amazon

Frequency of repeat purchases

Amount of repeat purchases

Share of wallet vs. competition

I like Amazon

I plan to buy from Amazon

Next time I buy, it will be from Amazon

Frequency of purchase

Amount of purchases

Awareness

Knowledge

Attitude

Purchase Intent

Postpurchase

Behavior and

Satisfaction

Loyalty

Awareness

Exploration/

Expansion

Commitment

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Chapter 16: Customer Metrics

Offline Customer Metrics

Online Customer Metrics

The Need for Integrated Customer Metrics

EBays Customer Metrics

Conclusion

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Exhibit 16.3: Stages of the Online

Buying Process

Search & shopping

Purchase

Postpurchase

Loyalty

Attrition

Number of visitors Requests for product information (e.g.,

page views and patterns)

Size of purchases

Conversion rates

Acquisition costs

Online satisfaction surveys

Frequency of repurchases

Dollar amount of repurchases Purchase intervals

Share of wallet in category

Lifetime value metrics

Interval since last purchase

Percentage of returns

Exploration/

Expansion

Commitment

Dissolution

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Chapter 16: Customer Metrics

Offline Customer Metrics

Online Customer Metrics

The Need for Integrated Customer Metrics

EBays Customer Metrics

Conclusion

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Ask and

Observe

Ask

Exhibit 16.4:An Integrated Model of

Customer MetricsAwareness

Knowledge

Attitudes

Purchase Intent

Search & shopping

Purchase

Postpurchase

Loyalty

Attrition

Search & shopping

Purchase

Postpurchase

Loyalty

Attrition

Purchase

Postpurchase

Loyalty

Awareness

Knowledge

Attitude

Purchase Intent

Observe

Observe

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Exhibit 16.5: Strengths & Weaknesses

of Online & Offline Metrics

Strong

Weak

Moderate Strong

Strong

Weak

Online Offline

Prepurchase

Attitude

Knowledge

Search and

Actual

Shopping

Behavior

Purchase and

Loyalty

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Exhibit 16.6: The Power of

Conversion Rates

Conversion Rate

2% 4% 8%

Advertising Costs $10,000 $10,000 $10,000

Visitors 5,000 5,000 5,000

Transactions 100 200 400

Cost/Transaction $100 $50 $25

Revenue $10,000 $20,000 $40,000

Marketing/Revenue (%) 100% 50% 25%

Note: Average transaction size = 100%

Source: Gurley, J. William, The Most Powerful Metric of All, CNetNews.com, 21 February 2000

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Integrated Customer Metrics

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Chapter 16: Customer Metrics

Offline Customer Metrics

Online Customer Metrics

The Need for Integrated Customer Metrics

EBays Customer Metrics

Conclusion

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Exhibit 16.9: Online Tracking

EBay Customer Metrics

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Exhibit 16.10: EBay Metrics Unique

Monthly Visitors (Mar 2002)

91899

8301078647

4095436016

33000 321542933429259 26232

0

20000

40000

60000

80000

100000

AO

LTim

eWarn

er

MSN

Micro

soft

Yaho

o

Terra

Lyco

s

Abou

t/Prim

edia

Goog

leGa

toreB

ay

Amaz

onCN

ET

Unique

Monthly

Visitors

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91.9

78.6

29.3 29.333.9

21.2

5.5 2.3

0

10

20

30

40

50

60

70

80

90

100

AOL* Yahoo eBay Amazon

Monthly Daily

Exhibit 16.11: EBay Metrics Unique

Monthly and Daily Visitors (Mar 2002)

Percent of Total

Web Users

(114 million)

80% 69% 26% 26%

UniqueVisitors

(in millions)

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Number of

Registered Users

(in millions)

2.2

10.0

42.4

22.0

0

5

10

15

20

25

30

35

40

45

Dec-98 Dec-99 Dec-00 Dec-01

Exhibit 16.13: EBays Registered-

User Evolution

Source: Company Reports

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38.8

21.624.3

7.49.5

5.9

0

10

20

30

40

50

AOL Yahoo eBay Amazon uBid Yahoo

Auctions

Exhibit 16.14: EBay Metrics Average

Minutes Spent per User per Day

AverageMinutes

Spent by

Customers

per Day

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Chapter 16: Customer Metrics

Offline Customer Metrics

Online Customer Metrics

The Need for Integrated Customer Metrics

EBays Customer Metrics

Conclusion

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Customer Metrics Conclusion

Traditional offline customer metrics and online customermetrics can be brought together in an integrative approach to

measuring and tracking customer experience.

Although there can be metrics that illustrate the integration ofphysical and online stores, there are a number of challenges to

developing and deploying this integrative customer experience

strategy.

In order to understand the success and performance of

marketing interventions, the link from customer metrics to the

companys financial metrics must be examined.