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

3. 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

4. Offline Customer Metrics Online Customer Metrics The Need for Integrated Customer Metrics EBay’s Customer Metrics Conclusion Chapter 16: Customer Metrics

5. Offline Customer Metrics Online Customer Metrics The Need for Integrated Customer Metrics EBay’s Customer Metrics Conclusion

6. Exhibit 16.2: Traditional Hierarchy-of- Effects Model Purchase 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 Awareness Knowledge Attitude Purchase Intent Postpurchase Behavior and Satisfaction Postpurchase Behavior and Satisfaction Loyalty Awareness Exploration/ Expansion Commitment

7. Chapter 16: Customer Metrics Offline Customer Metrics Online Customer Metrics The Need for Integrated Customer Metrics EBay’s Customer Metrics Conclusion

8. Exhibit 16.3: Stages of the Online Buying Process Search & shopping Purchase Postpurchase Loyalty Attrition 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

9. Chapter 16: Customer Metrics Offline Customer Metrics Online Customer Metrics The Need for Integrated Customer Metrics EBay’s Customer Metrics Conclusion

10. “Ask and Observe” “Ask” Exhibit 16.4: An Integrated Model of Customer Metrics Awareness Knowledge Attitudes Purchase Intent Search & shopping Purchase Postpurchase Loyalty Attrition Search & shopping Purchase Postpurchase Loyalty Attrition Purchase Postpurchase Loyalty Awareness Knowledge Attitude Purchase Intent Offline Online Integrated “Observe”

11. Exhibit 16.5: Strengths & Weaknesses of Online & Offline Metrics Strong Weak ModerateStrong Weak Online Offline Prepurchase Attitude Knowledge Search and Actual Shopping Behavior Purchase and Loyalty

12. Exhibit 16.6: The Power of Conversion Rates Note: Average transaction size = 100% Source: Gurley, J. William, “The Most Powerful Metric of All,” CNetNews.com, 21 February 2000

13. Integrated Customer Metrics

14. Chapter 16: Customer Metrics Offline Customer Metrics Online Customer Metrics The Need for Integrated Customer Metrics EBay’s Customer Metrics Conclusion

15. Exhibit 16.9: Online Tracking — EBay Customer Metrics

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

17. Exhibit 16.11: EBay Metrics – Unique Monthly and Daily Visitors (Mar 2002) Percent of Total Web Users (114 million) 80%69%26% Unique Visitors (in millions)

18. Number of Registered Users (in millions) Exhibit 16.13: EBay’s Registered- User Evolution Source: Company Reports

19. Exhibit 16.14: EBay Metrics – Average Minutes Spent per User per Day Average Minutes Spent by Customers per Day

20. Chapter 16: Customer Metrics Offline Customer Metrics Online Customer Metrics The Need for Integrated Customer Metrics EBay’s Customer Metrics Conclusion

21. 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.