(E-commerce) Use the Online Consumer Purchasing Model, Figure 6.11 in Chapter 6,

Question

(E-commerce)

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 would you advise doing to increase the number of purchases and loyal customers? what web design factors? What communications messages?

Please answer all questions :)

Explanation / Answer

Ans E-Mail sent 1,00,000 Cost per E-Mail 0.25 Cost of marketing Compaign 25000 Click rate 5% Total Perople clicking to the site 5000 Conversion to customer rate 10% People will make a purchase as a direct result of E-Mail 500 Average Sale Rate $            60.00 Gross Revenue $   30,000.00 Profit Margin 50% Gross Profit $   15,000.00 Net Profit $   15,000.00 Loyal customer retention rate 25% Total Number of Loyal customer 125 Additional Purchase $      7,500.00 Additional revenue $      3,750.00 Total Revenue $   18,750.00 Yes the compaign produce profit. To increase number of purchase and loyal customer there are various Ideaas 1 Proper information sent to the customer about the cusomer through E-mail 2 Offer an E-mail based fashion advice to the customers. 3 Set up an online forum or blog on the site.

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