Sofa Kingdom: Your point about size of sample, history of product and so on are all valid. Perhaps we can explore some of these issues at length later.
For now, I would point to the GUS study. Great Imperial Stores are the largest and most sophisticated catalogue seller in the UK with a highly advanced call-centre. They tested the NETP recommendation engine software agaisnt their own techniques for six weeks. NETP produced 50% greater sales. The same and better results have been obtained by others.
The typical situation given the optimum sized customer and selling price is that the cost of buying a NETP product is recovered in six months from increased sales.
Anecdotal evidence suggests that all of NETP major customers during the Christmas season increased not only their pverall revenues but revenues from up-sell, cross- sell and repeat sales - areas in which NETP contributes.
I think the evidence of the efficacy will accelerate.
The source of the growth rate of 50% sequential per quarter would arise from the following:
Direct Customers
These are those generated from NETP's own sales force, which has quadrupled. These are the high margin customers. The sales force is now concentrated on the high dollar customers which produced a 100% increase in revenues from Q3 to Q4.
1. New customers - there was a 15% increase in direct customers between 3Q and 4Q.
2. Up selling to old customers - NETP is selling 4 of its own products and all the KD1 products to some of its old customers who have only 1 NETP product.
3. Sales of NETP products to 40 existing KD1 customers.
4. Continuing, renewable sales of online support service, maintenance, consulting, upgrades to its ever-expanding customer base.
5. Continuing revenues from click-throughs achieved by some customers. Since customer gross revenues are expected to grow rapidly, then NETP's percentage will also grow.
Indirect Customers
These are low-cost, lower margin sales brought in by VARs, re-sellers, OEMs, system integrators, consulting groups. Also known as "the indirect channel".
6. Sales to indirect customers through Fingerhut, Broadvision, Doubleclick, Vignette, Oracle, Omnikron, Lycos, IBM and others. The combined customer base of existing partners is going to be in excess of 4,000 in FY2000. There will be new partners.
7. More substantial contributions from the start-ups in Asia and Europe.
8. Gearing up of knowledge management product which takes 6 months to sell. |
