Question

Use the Online Consumer Purchasing Model, Figure 6.11 in Chapter 6, to assess the effectiveness of an e-mail campaign at a small website devoted to the sales of apparel to the young adult market (ages 18–26) in the United States. Assume a marketing campaign of 100,000 e-mails (at $0.25 per e-mail address). The expected click-through rate is 5%, the customer conversion rate is 10%, and the loyal customer retention rate is 25%. The average sale is $60, and the profit margin is 50% (the cost of the goods is $30). Does the campaign produce a profit? What advise could you provide in order to increase the number of purchases and loyal customers? What do you think could be some web design factors? What communications messages?

Answer 1

Profit: Yes, the campaign generates a profit of $5,000. Advice: Focus on improving click-through, conversion, and retention rates. Web Design: Prioritize mobile-friendliness, clear navigation, and trust signals. Communication: Personalize messages, highlight value, and create urgency.

Calculate Revenue:

Click-throughs: 100,000 emails * 5% = 5,000 clicks

Conversions: 5,000 clicks * 10% = 500 purchases

Revenue: 500 purchases * $60/purchase = $30,000

Calculate Costs:

Email campaign cost: 100,000 emails * $0.25/email = $25,000

Calculate Profit:

Profit margin: 50%

Profit per purchase: 50% * $60 = $30

Total profit: 500 purchases * $30/purchase - $25,000 = $5,000

Advice for Improvement:

- Increase click-through rate:

- Personalized subject lines

- Eye-catching visuals

- Targeted offers

- Increase conversion rate:

- Strong product descriptions and reviews

- User-friendly checkout process

- Free shipping or discounts

- Increase loyal customer retention:

- Loyalty programs

- Personalized recommendations

- Post-purchase follow-up

Web Design Factors:

Mobile-friendly website

High-quality product images

Easy navigation and search

Trust signals and secure payment options

Communication Messages:

Emphasize value and unique selling points

Use clear and concise language

Offer urgency and scarcity incentives

Personalize communication based on customer data