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Year 1 Customers Retention rate Visits per year Amount spent per visit Revenue Cost rate Cost Acquisition cost ($170) Direct mail marketing messages @ $0.50 Marketing costs Total cost Pro t Discount rate NPV of pro t Cumulative NPV of pro t Lifetime value 200,000 40% 2 $160 $64,000,000 60% $38,400,000 $34,000,000 6 $ 600,000 $73,000,000 $9,000,000 1 $9,000,000 $9,000,000 -$45.00 Year 2 80,000 50% 3 $200 $48,000,000 58% $27,840,000 6 $ 6 00,000 $28,440,000 $19,560,000 1.07 $18,246,269 $9,246,269 $46.23 Year 3 40,000 60% 4 $220 $35,200,000 56% $19,712,000 6 $ 600,000 $20,312,000 $14,888,000 1.15 $12,955,280 $22,201,548 $111.01

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still shopping at the chain, the number of visits and spending per visit tend to grow. The chain spends $4.00 per year on direct-mail marketing messages, including seasonal specials. It loses money on women in the rst year, but overall it earns a good pro t from those who remain, so that the lifetime value of a newly acquired customer after 3 years is $111. The chain is doing well. Now we will determine the effect of additional email retention messages on a similar group of women, which we will call the test group. These women get 36 personalized email retention messages per year from the store, in addition to the regular direct mail. These messages cost $0.04 per message. They have the effect of increasing the retention rate by 5 percent, the number of visits per year by 0.2 visit, and the spending rate per visit by $5. Table 5-15 shows the results. As you can see, these retention messages have a dramatic effect on the women s behavior. Note that we could not have had this effect by simply increasing the number of direct-mail messages, which were costing us about $0.50 per message. Had we tried that, 36 messages per year would have cost us $18 per customer, or $3.6 million per year, which would have seriously eaten into pro ts. In addition, many of these email messages were quite timely and could not have been sent at all by direct

In this chapter, you looked at a number of controls and elements that aren t used primarily for displaying content, but for navigating and producing the standard graphical user interface. I covered the following elements: The TextBox is used for getting small amounts of text from the user. The Menu displays a set of options available to the user. Menus can be nested by nesting the MenuItem objects they contain. The ContextMenu is a menu attached to a particular element. It appears when the user right-clicks the element. A ContextMenu contains options valid for that element only. A ToolBar is a collection of UIElements allowing the user to quickly access the program s most common features. A StatusBar is a collection of UIElements that display information to the user about the status of the program. ToolTips are small windows with terse information about an element. They pop up when the mouse has hovered over the element for a threshold amount of time. The ProgressBar shows the user the progress that s being made on a particular task. It can also be used just to show that a task is currently being worked on. The Slider is a bar with a thumb that the user can slide back and forth within a range of values. The current position of the thumb sets the current value of the control.

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Year 1 Customers Retention rate Visits per year Amount spent per visit Revenue Cost rate Cost Acquisition cost ($170) Direct mail marketing messages @ $0.50 Marketing costs Email messages @ $0.04 Email total Total cost Pro t Discount rate NPV of pro t Cumulative NPV of pro t Lifetime value 200,000 44% 2.2 $165 $72,600,000 60% $43,560,000 $34,000,000 6 $ 600,000 36 $ 288,000 $78,448,000 $5,848,000 1.00 $5,848,000 $5,848,000 $29.24 Year 2 88,000 54% 3.2 $210 $59,136,000 58% $34,298,880 6 600,000 36 $ 126,720 $35,025,600 $ $24,110,400 1.07 $22,491,045 $16,643,045 $83.22 Year 3 47,520 64% 4.2 $240 $47,900,160 56% $26,824,090 6 600,000 36 $ 68,429 $27,492,518 $ $20,407,642 1.15 $17,758,376 $34,401,421 $172.01

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