chapter
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Customer MetricsCustomer 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
Offline Customer Metrics
Online Customer Metrics
The Need for Integrated Customer Metrics
EBay’s Customer Metrics
Conclusion
Chapter 16: Customer Metrics
Chapter 16: Customer Metrics
Offline Customer Metrics
Online Customer Metrics
The Need for Integrated Customer Metrics
EBay’s Customer Metrics
Conclusion
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
Chapter 16: Customer Metrics
Offline Customer Metrics
Online Customer Metrics
The Need for Integrated Customer Metrics
EBay’s Customer Metrics
Conclusion
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
Chapter 16: Customer Metrics
Offline Customer Metrics
Online Customer Metrics
The Need for Integrated Customer Metrics
EBay’s Customer Metrics
Conclusion
“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”
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
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
Chapter 16: Customer Metrics
Offline Customer Metrics
Online Customer Metrics
The Need for Integrated Customer Metrics
EBay’s Customer Metrics
Conclusion
Exhibit 16.10: EBay Metrics – Unique Monthly Visitors (Mar 2002)
91899
8301078647
4095436016
33000 321542933429259 26232
0
20000
40000
60000
80000
100000
UniqueMonthlyVisitors
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)
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
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
Chapter 16: Customer Metrics
Offline Customer Metrics
Online Customer Metrics
The Need for Integrated Customer Metrics
EBay’s Customer Metrics
Conclusion
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.