Home    Internet Marketing                                     Ward Hanson   Stanford GSB

Customer Equity - Session 5

Learning Objectives

Web Benefits to Firms

Closed-loop marketing

Web chain of events

 Case:  Pilgrim (B)

Spreadsheet

 

 
 
Readings & Tasks
Hanson, Ch. 5
Bell et. al. 7 Barriers
Gupta, Valuing Customers 
Jain & Singh, Customer LTV in Marketing 

Example Sites:
Improvement Based 

Provider pays models User pays models
Newstand & Airwaves
__/ 03-03\__
Internet Auto Sales,  Kansas City Star, Selling cars online 
__/ 03-30-00\__
Federal Agency Rethinks Internet Patents,  NY Times, Can, or should, business models be patented? 
__/ Current\__
Moving Beyond Merger, The ongoing scoop on the AOL-Time Warner Merger,  Washington Post 

 

 

 Profits matter.  Well, duh.  Actually, there was a time when that seemed like a shocking revelation and all entrepreneurs were interested in was buzz and new customer acquisition.  But not now, as all aspects of the Internet community looks for profitability as well as growth.  While indirect benefits are great, as an industry there also has to be external money flows into the sector.     

 

 

Web Chains:  Web chains are an analytical tool to evaluate the closed-loop benefits talked about in Chapter 5.  Use the chain to see the profitability benefits of improving such issues as

  • Lifetime customer value,
  • Click through rates, and
  • Conversion rates to buyers.

 
flowchart.gif (17411 bytes)
 

Pilgrim case:

  • Try to recreate the profit skew diagram in Figure TN-a. Hint:  Sort by profit as the first step.
  • How would you test whether profits are actually different between the two channels?
  • What statistical issues might arise with missing data?  How can you correct for that?
  • What would you propose as an effective method of categorizing the customer pyramid using this data?