e marketing
Post on 18-Jul-2015
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PROMISE
• Disintermediate• Closer alignment of demand and supply• Develop close and loyal relationship with endusers• Leverage information• Lower cost, price, higher sales, profit
Customer acquisition cost, “viral marketing” = CAC plummets with increased customers word of mouth; Why do most B2C’s fail? Expected too much “viral marketing”, but it is very rare, 6sigmas away from mean, only first movers, 3 months, “tipped market”
$90-180 Most .com’s 99%
<$40$40
CAC
t
WHAT WENT WRONG?
• Expensive customer acquisition cost
• Costly site development and maintenance
• Poor customer experience• Difficult to navigate• Ask for too much information
• Technology snags• Narrow band access• Slow servers
YET, THE PROMISE REMAINS
• Technology gets better, cheaper
• Broadband will be a boost
• Firms understand challenges better
• Buyer centric exchange: commerce one
• Easy supplier acquisition
• Neutral exchange: ariba
• Focus independent exchanges
Most of them failed in the B2B: suppliers run away when hear “auction”, main factor: supplier flow hard to establish critical mass on both sides, customer-suppliers
• Likely outcomes
– Market and revenue growth below expectations
– Process efficiency may dominate auction
CHANNEL TRANSFORMATION: EXCHANGES
PROMOTION: ADVERTISING
• The steep descent of clickrates– 2% to 0.4%
• Lower banner ad costs
• Emphasis on sign-ups/ acquisition
• Is advertising on the net dead?
NET ADVERTISING WILL BE POWERFUL
• Curse: you can measure its effectiveness!
• Strength: you can measure its effectiveness!
• Advertising is a low efficiency mechanism
• Substitute to complementary
• Better targeting; influence ‘consideration’
• Can be more interactive and effective
ACQUISITION THRU’ THE NET: ART TO SCIENCE
NextCard: Experiment, learn, modify – real time
• 100 ads at a time from a stock of 2000• 3 billion impressions on 100 sites; $3M/month• 200,000 tests/ year!• Example:
– Five controls; two new ads– Sign-ups same as controls– However, balance transfer was expensive
• 3 cents versus 16 cents for each dollar transfer
– New ad: one was twice as profitable as another
PRICING ON THE WEB
• Search bots– Www.Mysimon.Com was getting blocked out, why? Only attractive to
price sensitive customers, as yahoo offers service+convenience+price– Destroyer of value?– Modest success
• Portals are becoming e-merchants– Pay for listing, transactions– Paradox: block bots but pay portals!– A wide array of products– Www.Yahoo.Com
• Virtual groups: b2c to b2b• Dynamic pricing and promotions
– Ebooks, emusic time-sensitive valuation– Basket promotions– Learn more about demand curve: dynamic experimentation
PRODUCTS AND SERVICES: CUSTOMIZATION
• One to one marketing– Low cost customization– Based on behavior inference
• Collaborative filtering• Clickstream analysis
– Based on stated preferences• Www.Landsend.Com
DRIVE TRAFFIC
• Old game: search engine optimization
• Pay for listing– www.Overture.Com– www.Google.Com
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