I just posted an interesting discovery on the FreshBooks blog – the post includes a really useful tip for anyone building a web app.
Check out the article, and consider what the reduced conversion rate implies about users and their disdain for marketing offers in their user experience. Paul Kedrosky wrote this on eBay’s decision to offer Goolge Adsense ads on their site:
How do design distractions affect your bottom line over time…hard to calculate, but worth considering.
From my fellow mesh founder Stuart MacDonald’s blog:
As Chair of the Nominating Committee, I’ve been remiss in not mentioning that the CIRA Board Elections are happening now. If you own a .ca domain, this is your chance to influence the direction of the Internet in Canada, and I would encourage you to check out who is running, what they think, and to vote!
Nice selections Stuart.
If you are interested in shaping the direction of internet use in Canada, cast your vote.
I am working the spreadsheets this week and I am trying to quantify “the lifetime value” of a FreshBooks customer. In digging into that, I came across this excerpt from “Managing Customers As Investments“:
On average, a 1% improvement in acquisition cost improves customer value by only 0.1%. Improving margins by 1%, for example, by cross-selling, improves customer value by about 1%. This result is similar across firms and is consistent with the margin elasticity discussed in [an appendix]. Improving customer retention by 1% improves customer value by almost 5%. In addition, retention shows a virtuous cycle – the higher the current retention rate (e.g., Ameritrade’s 95% versus Amazon 70%), the higher the impact of improving retention.
Customer service in the services world – and I include web services in that world – is SO important. To some extent that belief has always been a gut thing; it’s great to find the research to backup your instincts. Here’s a good review of the book.
To which I replied: