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Page 1: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved
Page 2: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

chapter

1616

Customer MetricsCustomer Metrics

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

Page 3: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

Customer Metrics — Today’s 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 eBay’s customer metrics

Page 4: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

Offline Customer Metrics

Online Customer Metrics

The Need for Integrated Customer Metrics

EBay’s Customer Metrics

Conclusion

Chapter 16: Customer Metrics

Page 5: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

Chapter 16: Customer Metrics

Offline Customer Metrics

Online Customer Metrics

The Need for Integrated Customer Metrics

EBay’s Customer Metrics

Conclusion

Page 6: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

Exhibit 16.2: Traditional Hierarchy-of- Effects Model

PurchasePurchase

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

AwarenessAwareness

KnowledgeKnowledge

AttitudeAttitude

Purchase IntentPurchase Intent

PostpurchaseBehavior and Satisfaction

PostpurchaseBehavior and Satisfaction

LoyaltyLoyalty

Awareness

Exploration/Expansion

Commitment

Page 7: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

Chapter 16: Customer Metrics

Offline Customer Metrics

Online Customer Metrics

The Need for Integrated Customer Metrics

EBay’s Customer Metrics

Conclusion

Page 8: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

Exhibit 16.3: Stages of the Online Buying Process

Search & shoppingSearch & shopping

PurchasePurchase

PostpurchasePostpurchase

LoyaltyLoyalty

AttritionAttrition

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

Page 9: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

Chapter 16: Customer Metrics

Offline Customer Metrics

Online Customer Metrics

The Need for Integrated Customer Metrics

EBay’s Customer Metrics

Conclusion

Page 10: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

“Ask andObserve”

“Ask”

Exhibit 16.4: An Integrated Model of Customer Metrics

AwarenessAwareness

KnowledgeKnowledge

AttitudesAttitudes

Purchase IntentPurchase Intent

Search & shoppingSearch & shopping

PurchasePurchase

PostpurchasePostpurchase

LoyaltyLoyalty

AttritionAttrition

Search & shoppingSearch & shopping

PurchasePurchase

PostpurchasePostpurchase

LoyaltyLoyalty

AttritionAttrition

PurchasePurchase

PostpurchasePostpurchase

LoyaltyLoyalty

AwarenessAwareness

KnowledgeKnowledge

AttitudeAttitude

Purchase IntentPurchase Intent

Off

l ine

Onl

ine

Inte

grat

ed

“Observe”

“Observe”

Page 11: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

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

Page 12: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

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

Page 13: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

Integrated Customer Metrics

Page 14: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

Chapter 16: Customer Metrics

Offline Customer Metrics

Online Customer Metrics

The Need for Integrated Customer Metrics

EBay’s Customer Metrics

Conclusion

Page 15: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

Exhibit 16.9: Online Tracking — EBay Customer Metrics

Page 16: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

Exhibit 16.10: EBay Metrics – Unique Monthly Visitors (Mar 2002)

91899

8301078647

4095436016

33000 321542933429259 26232

0

20000

40000

60000

80000

100000

UniqueMonthlyVisitors

Page 17: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

91.9

78.6

29.3 29.333.9

21.2

5.5 2.30

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)

Page 18: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

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: EBay’s Registered-User Evolution

Source: Company Reports

Page 19: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

38.8

21.624.3

7.49.5

5.9

0

10

20

30

40

50

AOL Yahoo eBay Amazon uBid YahooAuctions

Exhibit 16.14: EBay Metrics – Average Minutes Spent per User per Day

AverageMinutesSpent by

Customersper Day

Page 20: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

Chapter 16: Customer Metrics

Offline Customer Metrics

Online Customer Metrics

The Need for Integrated Customer Metrics

EBay’s Customer Metrics

Conclusion

Page 21: chapter 16 Customer Metrics McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved

Customer Metrics — Conclusion

Traditional offline customer metrics and online customer metrics can be brought together in an integrative approach to measuring and tracking customer experience.

Although there can be metrics that illustrate the integration of physical 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 company’s financial metrics must be examined.


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