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ROI: Mad to Measure

Calculating the return on E-business investments isn't easy, but that doesn't stop companies from trying.

One metric is season tickets, which reduce a team’s dependency on more labor-intensive box-office sales. “The system helps us target and service season ticket holders, which offer a bigger bang for the buck,” says Cesarano. Since introducing the eCRM strategy, season ticket holders increased by 5.4 percent in the first year and 7.3 percent the following year, he notes.

“Our sales reps are able to focus their energies on the most likely targets for tickets to a particular event,” adds Cesarano. “And our service reps, through their wellness calls, enhance customer loyalty.” The number of such calls is up from zero before eCRM to nearly 7,000 this year.

The company measures the success rate of every individual sales campaign, tracking how much money went into the campaign and the results of who responded. “We also measure the number of customer complaints, as well as whether or not the customer later feels the problem has been resolved,” adds Cesarano. “And we measure the effectiveness of email notifications to customers about tickets to an event to determine how successful the strategy is.”

All measurements are proprietary, but Cesarano and Kotchik say they indicate conclusively that the strategy is a keeper. “We ask ourselves continually if we had to do this all over again, would we,” says Kotchik. “The answer is yes — even if it had cost twice as much.”

As the basketball season drew to a close in June, the Trail Blazers celebrated their 100th sold-out game. Scottie Pippen surely had something to do with that, but so did Tony Cesarano and Jim Kotchik. —Russ Banham


Mikasa (www.mikasa.com) learned the hard way how to be an etailer. In 1999, the Secaucus, New Jersey— based manufacturer of fine crystal stemware, dinnerware, and upscale gift products launched a Web site that it now says was simply a test balloon. “The site marketed only 400 of our 20,000 SKUs,” says Seth A. Rubin, director of ecommerce at Mikasa, which retails at upscale department stores and its own 165 shops.

Although the company spent little on the site, it made even less. Having failed to achieve a return on its investment, Mikasa shut it down after nine months.

The company remained keen on an Internet sales channel, but decided to take a completely different approach. Last year it relaunched Mikasa.com, using a customized version of the WebSphere Commerce Suite from IBM (www.ibm.com) and hosting the site at IBM partner Web Emporium (www.webemporium.com), a Phoenix-based application service provider.

Once they decide to outsource, many companies are only too happy to abandon any meaningful examination of ROI, but Mikasa CFO Brenda Flores keeps close tabs on several metrics. “We’re measuring ROI in terms of customer loyalty, revenue commitment, and cost-cutting,” she says.


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