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The change in shopping habbits

• My father worked on his own pc after his
  fourties.
• I had my own pc when I was 12.
• My brother has a pc since 6.

• Gartner G2 with 16449 respondents
• 39 increase in internet sales in the last
  quarter of 2001
• 80.5 go on buying
• Only 6 give up

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Having a bright idea, a few million dollars in
the bank from VCs, and a group of young and
energetic founders were not enough to distinguish
yourself in the long run Luis D. Arjona, McKinsey
Traditional management adage You cannot manage
what you do not measure. E-business addendum
You cannot manage what you do not define. Net
Genesis- Target Marketing
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A major problem facing research libraries today
is the lack of data about electronic resources
and services. Miller and Schmidt. It takes all
day to process 14 million filtered URLs. Its a
million per hour that were hitting. So, by the
time I get the data from 400 machines sewn
together and filter out the gifs and excludes and
the impressions, it takes 14 hours to process. A
Service Company

• Then which one is wrong ?

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Every site collects data. However Each site has
its own way!
A lot of e-commerce companies just really dont
know how to measure their business right now.
Nobody really knows because the industry is so
new that there isnt a standard of how to really
measure your success and how to gauge your growth
in the future. Is it going to be by your volume
of ordering? Is it going to be by your repeat
customers? A retailer company
E-metrics Measuring Web Success
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Solution Seeking Academicians

• Association of Research Libraries (ARL) 24
  universities
• DLF Initiative , Digital Library Federation
• European Commission EQUINOX Project
• The Publishing and Library Solutions Committee
  (PALS)
• The International Coalition of Library
  Consortia (ICOLC)

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Set of measurements which must (a) be consistent
with organizational missions, goals, and
objective (b) be integrated with an
institutions program review (c) balance
customer, stakeholder, and employee interests and
needs (d) establish accountability and (e)
include the collection and use of reliable and
valid data.

• Study of users and uses
• Cost and benefit analysis
• Study of staff impact and needs
• Engagement with information providers and their
  usage data services

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Solution Seeking Business Sector
McKinsey Company 250 000 data points
describing the behavior of on-line visitors to
the sites of hundreds of companies, employing
different models, during 18-month period from
January 1999 to June 2000
NetGenesis and Target Marketing White Paper
E-metrics / Business Metrics For The New Economy
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• Paco Underhill
• Why We Buy The Science of Shopping
• 65 of men trying a jeans buy the jeans, 25
  of the woman.
• The pet food should be located on a low shelf.
• Larger-size mens underwear should not.
• However needs huge amount of time, employee,
  money!
• Internet eases this procedure.
• There is no data collection problem. The problem
  is how to evaluate and benefit them.

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• Where to start first?
• What are our most important business goals at
  the moment
• Who are our customers
• What are we trying to accomplish
• What challenges do we face
• What channels bring customers to us
• What are the drivers of the purchase behavior
• Which marketing initiatives generate the most
  profitable customers

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• Which products or services present cross-sell
  and up-sell opportunities
• Which online customers buy from online
  channels
• What changes will make our site more
  customer-focused

Determine your position, determine your goals and
the tools you have, start doing the job,
evaluate your job, correct
mistakes and re-evaluate.
E-metrics
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How can e-metrics help us?

• Segment and profile customers for optimal
  targeting and personalization
• Understand customer lifecycles to develop
  customer acquisition and retention programs
• Develop real-time marketing programs to
  cross-sell and up-sell customers
• Evaluate web content, track the success of
  marketing campaigns and refine spending levels
• Enhance site design and navigation to improve
  browse-to-buy ratios and retention rates
• Reduce the costs of serving customers
• Attract and keep customers

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• shoe producer producing shoes not even
  considering the shoe size of the customers
• only 23 improve way of doing job
• 77 still use page visits and hits
• discipline that was always present in well-run
  organizations.
• incumbents ran out dot-coms
• incumbents with direct marketing channel
  (catalog sales)
• tradeoff between attracting visitors and
  qualified visitors

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• Dot-coms, doing hard to do offline
• Firms getting away from advertisement revenues

Basic e-metric terms Person visiting the
site....user Each time user explored the site ...
Visit Each visit composed of.... page views Each
click on images, texts..... hits
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Customer Relationship Management Customer
Lifecycle
1) Reach customers / potential
customers number of people saw your ad
/ potential customers
2) Acquisition First contact, making a contract?
3) Conversion We measure 16 types of
conversion and 15 types of retention. Portal
Company
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Converting acquired customer into an active
customer. He buys, sets up a personnel profile,
participates actively in joint discussions, chat
forums, uses a product configurator.
4) Retention keeping customers who already made
at least one purchase from us. 250 to acquire a
customer 24.5 in the first quarter 52.5 in the
following quarters Retained spent 57 more than
one time shoppers. 70 Retained consider
re-purchase
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4) Loyalty A regular customer of you, who also
became an advocate of you. Constitutes vast
amount of your sales. Makes your advertisement
voluntarily.
Customer Lifecycle Breaking
1) Abandonment Broken purchase fatiguing effects
-design/requirements technical inefficiencies
-time consumption
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• The ratio of abandoned carts to completed
  purchases per day.
• The number of items per abandoned cart vs.
  completed transactions.
• The profile of items abandoned versus
  purchased.
• The profile of a shopper versus a buyer.
• Kinkos

2) Attrition Customers going to a rivalry
3) Churn rate ratio of attrited customers to the
total number of customers at the end of any
period 2000 customers 200 new customers 50
lost customers 50/2150 Churn rate 200/2000
growth rate
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Customer E-metrics
RFM of the customers Recency/Frequency/Monetary
Value Customer history gives the best information
about customer behavior RFM divides into customer
segments, that are not intuitively available from
reports 1) Recency how long it has been since
your customer last visited your site Get back
attrited customers by the use of cookies by
special messages
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2) Frequency The frequency of the user Often
purchases Frequent users need more interest,
special offers, coupons, price reductions... Rare
purchases Determine demand, direct customers
through purchase B2B Especially important,
Determine demand, learn customer
3) Monetary Value Available after the first
purchase
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Cost Analysis
1) Acquisition cost The ratio of advertising
and promotional costs to number of
click-throughs 50000 2000000 on banner and
impressions 1 click through rate,then 20000
visits, 2.5 for each user
2) Cost per conversion is the ratio of
advertising and promotional costs to number of
sales. Convertiont rate 2.5 of the 20000 visits,
500 purchases conversion cost is 100
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3) Net Yield Ratio of total promotion cost to
total promotion results Two banners one has a
high click rate but low conversion rate, and the
other a lower click rate but higher conversion
rate
Connect rate, Duration...
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• It is much more profitable for any firm to try
  to develop retention rates
• E-metrics deals are much more profitable than
  cost deals

Ford vehicle pages, configurations liking,
painting the car, selecting some audio ------ not
potential customers review financing options
likely to make a deal with the retailers
Amazon One click sales conversion 15