I have seen a number of your answers and would welcome if you could
help me with my question: What are some of the business financial
models for attract customers to an online shopping portal ? Eg (what
are the likely metrics in acquistion, registration, retention and
attrition) Specifically i am also looking for excel spreadsheets that
i can use to test the models. Thanks |
Request for Question Clarification by
omnivorous-ga
on
18 Jun 2003 12:21 PDT
Itsmechang --
Thanks so much for the request. I'm trying to put together a list of
the metrics in which you might be interested for another Clarification
Request. . .
You're planning a shopping portal -- as opposed to an online retail
site itself. Without divulging competitive information, can you tell
me a little about location (particularly if it's outside the U.S.) &
business model?
Best regards,
Omnivorous-GA
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Clarification of Question by
itsmechang-ga
on
18 Jun 2003 17:35 PDT
Location of the service is Australia. However it would have
application in US and world markets. The portal will not sell retail
product. Instead we will be providing an information service to
consumers that register. So the number of registrations is important.
Our business model is quite fluid at the moment, so any insight into
which works/doesn't would be great appreciated. Especially on models
that do NOT use advertising to support themselves. We are looking for
a model that is easily scalable and duplicated.
Ones that have interested us are those that have a symbiotic
relationship for the acquisition of customers from another source. (eg
use this content/app on your site and it will provide extra value to
your client base, whilst at the same time acquire potential leads for
the other company. I hope that helps.
Basically what are the best business models on the internet ? Which
ones work and are producing profit for the companies using them ?
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Request for Question Clarification by
omnivorous-ga
on
22 Jun 2003 20:12 PDT
Itsmechang --
I'll have a detailed list of Internet metrics for you in about 12
hours. Many of these measures are for primary customers (customer
acquisition, lead generation, time-on-site), which I hope is not a
problem for you running the portal. As a portal company, I'm assuming
that you're interested in these prime measures in order to best serve
your customers.
If I'm pursuing this incorrectly, please let me know.
Best regards,
Omnivorous-GA
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Clarification of Question by
itsmechang-ga
on
22 Jun 2003 22:32 PDT
This is in the right direction. I have been to a site
www.customerequity.com and this provides theoretical application on
acquisition / retention etc. I am looking at real world examples. This
nonetheless will help in providing direction. Cheers.
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Request for Question Clarification by
omnivorous-ga
on
23 Jun 2003 17:07 PDT
Itsmechang -
Small world: I had Bob Blattberg, of Customer Equity, for information
technology classes at the University of Chicago.
This question is a chance to explore the area of "webmetrics" or
analysis of measures available for web-based businesses.
Here's what I'd like to suggest that we seek - with financials for
them to the extent possible. Recognize that these will vary highly
from you to Amazon.com but as a portal, I think that you'll find them
valuable in planning and marketing, nonetheless.
There's a lot here, so you may wish to pare this down to areas that
are core to you. Remember that the basics are:
1. what's it cost to acquire a customer?
2. how can we measure what a customer's long-term value is?
3. what are key factors to customer retention?
4. what do web page failures cost? Here we're not just talking about
server downtime but measures all of the way through the process,
including what causes people to start a transaction but not complete
it?
WEBMETRICS
Site downtime
Web page load time
* load time by geography
Page error generation (by type)
Dwell time per page
Time on site
Page hits (by page)
Source of web hits:
* by geography
* by organization type
* by domain name
* by search engine
* by search term
* by affiliate or link
* by browser type
* pay-per-click
* other referral (advertising, direct mail, billing, e-mail)
Page hits by:
* time
* day-of-week
Frequency of customer visit
Customer segmentation
Price discrimination strategies
Customer satisfaction metrics
* satisfaction levels
* return rate
* reasons for attrition
Transactions started
Transactions completed
Transactions abandoned
Dollars per transaction
Cost per lead
Cost per lead comparisons (advertising, direct mail, etc)
Cost per transaction
Cost per transaction via phone
Cost per registration
Cost per registration (traditional)
Registration rate via web
Registration rate (traditional)
The thrust of my research would be to see what kind of data we can
find for each category, subject to a reasonable time limit.
If however, you wish to stick to more basic financial measures in
acquisition, website usage, retention and attrition - please let me
know.
Best regards,
Omnivorous-GA
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Clarification of Question by
itsmechang-ga
on
23 Jun 2003 17:23 PDT
Omnivorous, small world!!! Ok, the webmetrics below are fine for a
existing business and will be of value once started. However, I am
just developing a plan for my idea and this type of information would
be tooooo detailed for that. I would prefer to concentrate on the more
"basic" measures.
Bob Blatterg stuff i found quite interesting (I am waiting on Amazon
to ship) and if you memory from uni is ok, then I would be interested
in "excel" sheets describing his theories. Alternatively someone
similar.
Basically in a nutshell - think as if you are providing this financial
model to a potential investor. Only provide what is necessary. Hence I
think that the Blatterg stuff is ok, so long as I can just plugg in
the numbers. Thanks for your clarifications, much appreciated that you
are trying your best to get the most correct answer for me up front.
:)
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Request for Question Clarification by
omnivorous-ga
on
23 Jun 2003 17:53 PDT
Knowing that you're planning to do this as part of a financial plan is
great. What's been throwing me is the portal part, as it seems that
it puts you a step away from the actual customer.
Give me about 24 hours and we'll see what measures we can find.
The excercise of creating a list of webmetrics was valuable to me, in
any case.
BTW, I studied under Blattberg before he moved to Northwestern in 1991
(at the University of Chicago's Graduate School of Business). Long
before the Internet.
Best regards,
Omnivorous-GA
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Clarification of Question by
itsmechang-ga
on
23 Jun 2003 20:17 PDT
As for the "portal" we will know both customers (manufacturers +
consumers), as both will register with our service. Hope that helps.
So it will but slightly different to true use of the word "portal".
Cheers.
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Clarification of Question by
itsmechang-ga
on
26 Jun 2003 08:19 PDT
Hello Omnivorous ?........wondering if you are still able to help. It
is becoming quite urgent, i have been waiting patiently for a reponse
for a few days now. Are you any closer to completing ? Thanks :)
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Request for Question Clarification by
omnivorous-ga
on
26 Jun 2003 08:46 PDT
Itsmechang --
Hope to wrap this up today (Thursday) but this is a large task. If
getting this done in the next 8-12 hours isn't fast enough, please
feel free to expire this question and re-post it for other
researchers.
Best regards,
Omnivorous-GA
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Request for Question Clarification by
omnivorous-ga
on
26 Jun 2003 14:43 PDT
Itsmechang -
I've spent some time looking for anecdotal information but have also
run across what is probably the most-authoritative source for web
commerce information. Unfortunately my normal sources here in Seattle
don't have access to the two studies.
The most-relevant study is the 24th edition of the Direct Marketing
Association's statistic summary, which includes:
* acquisition cost per customer online
* conversion costs by medium (comparison to direct mail, etc.)
* budgets for catalog web operations
* analysis of web leads & sales costs vs. other media
* breakeven analysis by order
* e-mail response measures
The least-expensive site that I've seen for the DMA study is:
Sherpa Store
"Direct Marketing Association 2002 Statistical Factbook" (2003)
http://sherpastore.com/store/page.cfm/1988
The DMA also has a second survey specific to E-Commerce. This latter
page may require registration on the DMA site. Note that DMA sells
its reports direct for MEMBERS at 50% of the price charged to
non-members, so joining DMA can be advantageous, if only for the
publications:
Direct Marketing Association
"5th Annual E-Commerce Survey"
http://www.the-dma.org/cgi/registered/research/ecommercesurvey.shtml
I'm checking some academic sources now to see if there is good survey
data available but wanted to make you aware of this. There's a
possibility that a good business library in Australia may have either
or both reports (though the University of Washington Foster Business
Library does not). There's also the possibility that a business
contact of yours may have one or both reports.
Please note that this is not an answer and as such, you won't be
charged for this.
I'm continuing to try to find some meaningful financials on:
* cost of customer acquisition
* customer valuation
* customer retention
* web page failure costs
Best regards,
Omnivorous-GA
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Clarification of Question by
itsmechang-ga
on
26 Jun 2003 19:21 PDT
Thats fine, if you think at only half a day away. Thanks :)
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Request for Question Clarification by
omnivorous-ga
on
27 Jun 2003 07:29 PDT
Itsmechang --
I'm running into problems finding meaningful financial data on this.
The best source seems to be the DMA data and though I have excellent
marketing resources, no one seems to have either report.
Measures of customer acquisition & retention (not to mention volumes
and costs) vary highly by business type; Internet model; and size.
That's the problem: different numbers for different types of web
businesses make information on, for example, New York Times digital
media, difficult to apply.
Please take a look at the following page put together by a University
of North Carolina professor -- which simply highlights the types of
business models. Of course many companies combine a couple of these
models:
Digital Enterprise -- Prof. Michael Rappa
"Business Models on the Web"
http://digitalenterprise.org/models/models.html
Rappa's pages include a host of links on different case studies,
linked on the page above or better-organized below:
http://digitalenterprise.org/cases/
Note in particular the cases on business model.
Best regards,
Omnivorous-GA
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