Performance metrics
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Performance Metrics. Assist. Prof. Dr. Özge Özgen 20.12.2011. OBJECTIVE Develop an understanding of how to assess the financial and strategic performance o f an e-business company. 4231 views and mentions of your viral marketing campaign on the first day 4231 is a measurement.

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Performance metrics

Performance Metrics

Assist. Prof. Dr. Özge Özgen

20.12.2011

OBJECTIVE

Develop an understanding of how to assess

the financial and

strategic performance ofan e-business company.


Performance metrics

  • 4231 views and mentions of your viral marketing campaign on the first day

    • 4231 is a measurement.

    • Without a context, it is just a number

  • Consider goals and expectations of your company and your competitors’ effort


Performance metrics1

Performance Metrics

  • Metrics translate the company’s vision, mission or e-business model into components with measurable outcomes.

    • The performance metrics must be easy to understand and use

    • Metrics must be actionable

    • When employee evaluations are tied to metrics, people will be motivated to make decisions that lead the desired outcomes


Metrics framework

Metrics Framework

Financial Metrics

Customer-Based Metrics

Objectives

ImplementationMetrics


Financial and other metrics of overall performance

Financial and Other Metrics of OverallPerformance

Performance Relative to Competitors

Financial Metrics

  • Sales

  • Revenue

  • Gross Margins

  • Profits

  • Marketing Spend

  • Market Share

  • Relative Return on Investment


Traditional hierarchy of effects model

Traditional Hierarchy-of-Effects Model

Hierarchy-of-Effect Stages

Sample Metrics

Relationship Stages

Awareness

Exploration/ Expansion

Commitment

Dissolution

Awareness

  • I am aware of Amazon

  • I know what products Amazon carries

  • I know Amazon vs. BN.com

Knowledge

Attitude

  • I like Amazon

Purchase intent

  • I plan to buy from Amazon

  • Next time I buy, it will be from Amazon

  • Frequency of purchases

  • Amount of purchases

Purchase

Post-purchase

behavior and

satisfaction

  • Quality of customer service interactions

  • Satisfaction with Amazon

  • Frequency of repeat purchases

  • Amount of repeat purchases

  • “Share of wallet” vs. competition

Loyalty

Not in model


Stages of online buying process

Stages of Online Buying Process

Hierarchy-of-Effect Stages

Sample Metrics

Relationship Stages

Exploration/ Expansion

Commitment

Dissolution

Search and shopping

  • Number of visitors

  • Requests for product information (e.g.,page views and patterns)

Purchase

  • Size of purchases

  • Conversion rates

Post-purchase

  • Online satisfaction surveys

  • Frequency of repurchases

  • Dollar amount of repurchases

  • Purchase intervals

  • “Share of wallet” in category

  • Lifetime value metrics

Loyalty

Attrition

  • Interval since last purchase

  • Percentage of returns


An integrated model of customer metrics

Awareness

Knowledge

Attitudes

Purchase intent

Search and shopping

Search and shopping

Purchase

Purchase

Post-purchase

Post-purchase

Loyalty

Loyalty

Attrition

Attrition

An Integrated Model of Customer Metrics

Offline

Online

Integrated

Awareness

Knowledge

“Ask”

Attitudes

Purchase intent

“Observe”

Purchase

Post-purchase

“Ask” and

“Observe”

Loyalty

“Observe”


Conversions

Conversions

  • Conversion is the number of visitors who took a desired action on your site

    • Buy Something

    • Download

    • Filled out a form

  • Conversion Rate = Desired Action /Total Number of Visitors (Typically 1 month)

    • For example, if 1,000 unique visitors were driven to your website from a search engine and 10 elected to purchase a product then your “sales” conversion rate would be 1.0%.


The power of conversion rates

The Power of Conversion Rates

The chart illustrates that a small improvement in conversion rate has a large increase in revenue

Note: Average transaction size = 100%Source: Gurley, J. William. The Most Powerful Internet Metric of All. CNet.com, 21 February 2000.

URL: http://news.com/Perspectives/2010-1072-281288.html.


Frequently used website metrics

Frequently Used Website Metrics


Www onlinewebstats com

www.onlinewebstats.com


Frequently used online advertising metrics

Frequently Used Online Advertising Metrics


Complexities and challenges in online metrics

Complexities and Challenges in Online Metrics

In developing and deploying online metrics, a number of challenges may arise:

Are relevant data being used?

How does one capture the one-time buyer more effectively?

Are metrics integrated across channels?

Who is the advocate for integrative customer metrics?

Are marketing costs accounted for?


Social media metrics

Social Media Metrics

  • Social media leads.

    • Track web traffic breakdowns from all social mediasources, and chart the top few sources over time.

  • Membership increase and active network size

  • Activity ratio.

    • How active is your company’s collective social network? Compare the ratio of active members vs total members


  • Social media metrics1

    Social Media Metrics

    • Conversions

    • Brand mentions in social media

      • Virality.

        • Social members might be sharing Twitter tweets and Facebook updates relevant to your company, but is this info being reshared by their networks?

        • How soon afterwards are they resharing?

        • How many Friends of Friendsare resharing your links and content?


    Online tracking ebay customer metrics

    Online Tracking — EBay Customer Metrics

    Stages

    Customer Metrics

    Implementation Metrics

    Search and Shopping

    • Number of unique visitors

    • Number of repeat visitors

    • Number of registered users

    • Website: Number of page views, length of stay (stickiness), pattern of sites visited

    • Community: Number of users on My eBay

    Auction

    • Number of auctions user participates in

    • Average dollar amount per auction

    • Average dollar amount per product category

    • Website: Time spent inside auction

    • Product: Conversion to “Buy Now” feature; length of auction

    • Communications: Conversion to “E-mail a Friend”

    • Distribution: Profitability per seller

    Post-auction

    • Percentage of returns

    • Online satisfaction surveys

    • Auctions won vs. lost

    • Community: Replies to feedback, number of fraud reports

    • Website: Transactions finalized vs. dropped

    Loyalty

    • Frequency of auction participation

    • Interval since last auction

    • Share of auctions (identify competitors)

    • Distribution: Items sold vs. not sold


    Ebay metrics unique monthly visitors march 2002

    EBay Metrics — Unique Monthly Visitors (March 2002)

    Unique MonthlyVisitors

    Source: Media Metrix U.S. Top 50 Web and Digital Media Properties, March 2002


    Ebay metrics unique monthly and daily visitors march 2002

    EBay Metrics — Unique Monthly and Daily Visitors (March 2002)

    One quarter of all Web users visit eBay.

    UniqueVisitors(in millions)

    Percent of Total Web Users (114 million)

    80%

    69%

    26%

    26%

    Source: Jupiter Media Metrix, March 2002


    Ebay metrics unique daily visitors to auction websites march 2002

    EBay Metrics — Unique Daily Visitors to Auction Websites (March 2002)

    EBay has more visitors than all other auction websites combined.

    Daily Unique Visitors (in millions)

    Audience size for all auction sites with reportable traffic:32.6 million monthly unique visitors

    6 million daily Unique visitors

    Source: Jupiter Media Metrix, March 2002


    Ebay s registered user evolution

    EBay’s Registered-User Evolution

    EBay’s registered user base has doubled or almost doubled every year.

    Number of Registered Users(in millions)

    Source: Company Reports


    Ebay metrics average minutes spent per user per day

    EBay Metrics — Average Minutes Spent per User per Day

    EBay rates high in “stickiness.”

    eBay vs. other popular websites

    eBay vs. other auction websites

    Average Minutes Spent by Customers per Day

    Source: Jupiter Media Metrix, March 2002


    Customer metrics conclusion

    Customer Metrics — Conclusion

    • Each set of metrics – financial, customer-based and implementation – gives managers information on different aspects of performance.

      • Financial metrics assess the bottom-line performance of the business

      • Customer-based metrics measure the health of the business’s customer assets

      • Metrics that measure the implementation of the marketing program explain what actions need to be taken to strengthen the customer base and, ultimately, the financial results


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