Chapter Eight: Metrics

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Chapter Eight Metrics

• Introduction to e-Commerce
• Emmett Dulaney

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Metrics

• Metrics can improve a firms growth and vitality
  by
• Forcing a better definition of the business model
• Improving the communication of strategy
• Taking advantage of instantaneous performance
  tracking

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Traditional financial metrics

• Include
• Cash flow
• Gross margins
• Operational income

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Customer metrics

• Include
• Market share
• Customer satisfaction
• Profitability

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Internal business process metrics

• Include
• Innovation
• Operations
• Postsale service

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The Balanced Scorecard Model

• Created by Kaplan and Norton
• Attempts to reduce the number of metrics managers
  have to constantly look at (and offset their
  focus on short-term financial performance)
• It looks at four areas Financial, customer,
  internal business process, and learning/growth
• While a useful tool, it fails to address
  important unique needs of online firms
• (exhibit 8.1 page 278)

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In The Performance Dashboard Model

• The strategy framework drives the necessary
  metrics
• Resources are featured
• Partnerships are featured
• Developing the business strategy is the most
  important step in implementing the performance
  dashboard.
• In attempting to prepare for the future, a firm
  must identify leading indicators.

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Key Concepts

• Metrics used to assess the firms value
  proposition should focus on customer perceptions
• The consumer reaction to a website is measured
  by customer interface metrics
• Customer outcome metrics include
• Average order size
• Customer acquisition costs (during the customer
  acquisition stage of the companys life, market
  share is the primary strategic concern)
• Customer profitability

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Key Concepts (cont)

• Incentive programs are primarily concerned with
  creating customer loyalty (traditionally, firms
  have focused on the purchase stage of the
  customer process)
• Firms which provide a consistent customer
  experience in both their online and offline
  channels are said to be seamless. Seamlessness
  metrics includes
• The ability to open/access online/offline
  accounts
• Integrated customer databases
• Seamless order processing/tracking

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Research

• The major advantage of using analyst research
  is expertise. Hoovers, for example, is known for
  its financial information
• User-based research (such as BizRate.com) can
  deliver large input bases, credibility, and
  trust, but lack expertise (fickleness, etc.)

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I am starting a web site

• to compete with Amazon.com.
• What do I want to know about my visitors?

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I am starting a web site

• to compete with addictinggames.com.
• What do I want to know about visitors?

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How Important are these Metrics?

• When visitors go to anderson.edu, the
  subdirectories they access in order of most
  popular to least popular are
• /athletics
• /humres
• /academics
• /welcome
• /cgi-bin
• /admissions
• /campus
• /falls

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/falls related information

• The busiest days of the week are Monday and
  Tuesday
• The average number of views per day is between
  1700-1850 (peaks are above 2000 and valleys are
  below 1000)
• The most popular folder beneath /falls is /mba
  with 6.8 of views (/images is over 50)
• The most popular file is /falls/faculty.html
  (12.99)

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/falls/faculty

• Is the entrance page 18.79 of the time
• Is the exit page 44.44 of the time
• Has an average view time of 32 minutes, 5 seconds

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Misc

• 72 of all visitors to anderson.edu are in the
  same timezone
• The most common screen resolution is 1024x768
  (65)
• The most common color depth is 32-bit (78)
• 84 of all visitors are running IE, 90.54 are
  running Windows

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• What, of this, can you use?
• What doesnt matter at all?