We discussed how the internet targets specific actions. Since there are different business models, we asked how do people engage in this activity. Examples: Amazon traffics as an Aggregator for selling many items. Wall St. Journal sells news (info) using a Content Provider model.
There are 2 differences between business models vs Revenue Models. Wall St. Journal has revenue through Subcription type model as opposed to Amazon for which revenue comes through commission associates and advertising. Conceptually with regard to revenue, we question whether the basic economic model will hold. The answer is yes. We discussed auctions which prequality customers for a fee. The customer benefit — saves money on auction. But I am confused on this example.
I found interesting how many e-commerc sites create new markets, the more information a site generates, the more business opportunities arise. The more targeted – the more opportunity is created – more revenue.
Internet is an interactive tool, a unique median in that gives almost unlimited information. It is a media too, you get it instantly. We require 3 things from our customer – to acquire, convert and retain them. The critical strategy elements from a direct response perspective are the offer, email list, media, service/suport and creative exeution. We build Customer Lifetime Value (loyalty, good customer servie and brand recognition. As we know, it is far less expensive to retain existing customers then to acquire new ones.
Lastly I learned about switching costs and how to test market research differences. Quetions like Who is my target market, who gets exposure, and you need control and one modification. It will tell us what people will buy which in turn is priceless statistical information. It tells us why we buy certain things. These may be simple but critical questions helping us solve issues like testing cost effectiveness.