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How does a $2 million software sale happen? This case traces efforts by Siebel Systems to sell lead management software to discount broker Quick & Reilly. The buying process is mapped out over four years. Covers in detail the last six months--from Siebel's initial involvement to a challenge from competitor Oracle to the climax. The structure of Quick & Reilly's buying center is mapped, as is the role of its parent, Fleet Bank. The fortunes of the sale rise and fall as the Siebel account manager faces one obstacle after another. Presented in three parts, with opportunities to debate the account manager's choices and actions at each state. Part 3 describes the unfolding of the sale over a 4-year period.

Electronic Arts (EA), the world's largest independent game publisher, is preparing to launch an online, subscription-based version of the most popular PC game in history: The Sims. The new game is called "The Sims Online" and it differs from the original game in two key respects: the gaming experience and the payment structure. In this context, EA managers must finalize several decisions that they believe are fundamental to the game's success, including target market selection and pricing/payment structure.

Supplements the case.

Introduces the central concepts involved in determining customer lifetime value, with detailed analysis and examples from the realm of direct marketing. Implications for marketing strategy and customer relationship management are briefly discussed.

In 2002, Great Dakota Bank's retail division is considering how heavily it should be promoting the company's online banking service. A recent promotional campaign appears to have significantly increased enrollments in online banking, but it is unclear whether the bank should continue to trade promotional incentives for online subscriptions. Contains data that force students to consider the impact of adding a new low-cost channel (the Internet) on consumer behavior; this analysis raises questions about whether the new channel does, in fact, lower the cost to serve customers.

Spreadsheet supplement for case 503019.

In August 2002, Microsoft approached the one-year anniversary of its video game console, the Xbox. The first wave of console systems were available in the United States, Japan, Europe, and Australia, and the second wave of rollouts was targeted for Asian markets: Korea, Taiwan, Hong Kong, and Singapore. Dan Adelman, business development manager for the Xbox, and Brenda Ng, Xbox's consumer strategy and research manager, considered the marketing data for the Korea launch. They needed to analyze the findings of the first report and to identify issues to resolve in a second, follow-up marketing study. Over the course of the next few months, Adelman and Ng would direct the Xbox team in identifying console purchase drivers and deciding what segments of gamers to target and the message to send to the target segments.

The "eInstant Bonus" was an interactive advertising concept designed internally by the Mass Transit Railway Corp. Ltd. (MTR) in Hong Kong. Under this scheme, special discount offers from merchants/advertisers were displayed on a 42-inch Plasma TV in the form of a 10-second static slide or a 30-second TV commercial. Passengers could select items on the touch-screen monitor and a discount coupon would be issued. The discount coupon could then be redeemed for products or services purchased at the merchant's premises. For each coupon issued, a transaction fee of $1.00 would be deducted from the passenger's Octopus Card. This case illustrates the use of information technology by a large corporation for strategic alignment and value creation. Multimedia kiosks are a new phenomenon of the 1990s to provide personalized and interactive customer service on-site. Discussion is provided on the concepts and applications of kiosks for a customer service organization. The MTR eInstant Bonus project is considered a successful innovation by various measures. Also provides an understanding of innovation adoption and diffusion, specifically, how the attributes of the innovation relate to its rate of adoption and diffusion.

Avon has always sold its products through a large independent direct-selling organization. However, it is now considering whether it should sell directly to the consumer. The company's independent representatives number 500,000 in the United States alone. Yet, there seems to be potential for Avon to grow their business on the web in new and different ways. What benefits might Avon reap from using the Web to improve its relationship with its customers, with its representatives, and between the representatives and their customers. Includes color exhibits.

As a major player in Western Canada's real estate market, Mainstreet Equity Corp. has a unique strategy for success: instead of simply buying and selling properties, Mainstreet also upgrades and manages them, thereby enhancing their value. In particular, Mainstreet concentrates its efforts on the multifamily sector, acquiring apartment buildings and townhouses to rented or sold at a profit under the Mainstreet brand. The company president and chief executive officer is at a professional crossroads where the future of Mainstreet is concerned. He wants to ride the wave of rapid growth that his young company is experiencing, yet at the same time, he wants to preserve the values of a small entrepreneurial firm. Control over issues such as quality, service, buying and staffing is important to him and easy to facilitate under current conditions. But the opportunity to expand is also tempting and at hand. Mainstreet's board of directors must work towards a decision regarding whether or not to expand the business, and if so, how rapidly and where? Or if not, the board must decide on an alternative course of action that would prepare the company for expansion in the future.

Spreadsheet supplement for case 503016.

Three years after launching a content-based Web site, a nationwide hard goods retailer invested in software to support Internet shopping. The online component was one element in a multiple channel retailing approach, which also included retail stores, a phone-order service and an annual catalog. Although the company is the country's most shopped retailer, the online retail segment has not turned a profit. The director of marketing must consider the effect of multiple channel retailing on the company's profitability.

When the XFL professional football league debuted on February 3, 2001, it generated a Nielsen rating of 10.1, higher than any nationally televised program in a Saturday evening time slot. The next week, ratings plummeted, and by week nine the XFL game earned the title as the lowest rated sports event in television history. Co-owners WWFE and NBC officially disbanded the XFL on May 10, 2001. What went wrong? How could two seasoned and respected figures in entertainment--WWFE's Vince McMahon and NBC's Dick Ebersol--have miscalculated so badly?

Malkam Cross-Cultural Training is a provider of language and cultural diversity training. A development associate must prepare recommendations for the firm's latest marketing campaign. The company was anxious to develop its company brand as distinct from the reputation of its founder and president. The development associate had narrowed the promotional choices to two: develop a direct mail campaign or a print advertising campaign. He must be able to gauge and monitor the success of either or both campaigns.

This study profiles the changing demographics and unique consumption patterns of the African-American consumer segment of the financial services market. When it comes to the selection and purchase of financial products and services, African-American consumers differ markedly from their white counterparts. This is especially apparent in the case of relatively high-risk, high-return financial assets, resulting in a diminished rate of wealth accumulation over time in African-American households. This article offers suggestions to marketers seeking to render more effective service to this attractive and growing segment of the financial services marketplace. For example, promotional materials should reflect the key role of African-American women in determining household consumption patterns. Moreover, successful marketing to African-American households requires a strong educational component.

Who wouldn't want loyal customers? Surely they should cost less to serve, they'd be willing to pay more than other customers, and they'd actively market your company by word of mouth, right? Maybe not. Careful study of the relationship between customer loyalty and profits plumbed from 16,000 customers in four companies' databases tells a different story. The authors found no evidence to support any of these claims. What they did find was that the link between customers and profitability was more complicated because customers fall into four groups, not two. Simply put: Not all loyal customers are profitable, and not all profitable customers are loyal. Traditional tools for segmenting customers do a poor job of identifying that latter group, causing companies to chase expensively after initially profitable customers who hold little promise of future profits. The authors suggest an alternative approach, based on well-established "event-history modeling" techniques, that more accurately predicts future buying probabilities. Armed with such a tool, marketers can correctly identify which customers belong in which category and market accordingly. The challenge in managing customers who are profitable but disloyal--the "butterflies"--is to milk them for as much as you can while they're buying from you. A softly-softly approach is more appropriate for the profitable customers who are likely to stay loyal--your "true friends." As for highly loyal but not very profitable customers--the "barnacles"--you need to find out whether they have the potential to spend more than they currently do. And, of course, for the "strangers"--those who generate no loyalty and no profits--the answer is simple: Identify early and don't invest anything.

This is an MIT Sloan Management Review article. Why do your customers choose to buy from you rather than from your competition? For the past three years, marketing professors Mark Vandenbosch and Niraj Dawar have posed that question to more than 1,500 senior executives in interviews and group discussions. And despite the vast range of industries represented by the executives they probed, the responses they got were remarkably similar: Customers often value how they interact with their suppliers as much or more than what they actually buy. As the main drivers of customer choice, the executives cited cost-oriented factors such as convenience, ease of doing business, and product support and risk-oriented factors such as trust, confidence, and the strength of relationships. Strategies built around reducing customers' interaction costs and risk offer a systematic way to tap into new sources of customer value while avoiding the often futile attempt to compete on product innovation. The authors illustrate five different strategies that some companies are using to build a sustainable advantage.

The founders and proprietors of a successful 23-year old women's apparel store are facing a critical issue. Can they grow by adding a second store that will not compete with their existing operation? If so, where should it be located, what managerial changes are required to make the second store successful, and how can it be funded without putting at risk the financial stability of the existing business?

Vans is best known for selling footwear and apparel to skateboarders, surfers, and other alternative sports athletes. In April 2002, Gary Schoenfeld, the CEO, is facing a number of challenges. With respect to footwear, he must decide what to do about two product lines that are struggling--the outdoor line of hiking shoes and the women's collection. More broadly, Vans is currently embarking on a number of new ventures, some of with which the company has little experience. For example, Vans is in the process of promoting a full-length movie, creating its own record label, and working with video-game developers to develop games based on its sporting events. Traces the up-and-down history of a niche fashion brand in a market in which consumers are notoriously fickle. In recent years, the CEO appears to have revived the brand; however, it is unclear whether the company is in danger of losing its hardcore customer base as it ventures into the consumer mainstream.

Lays out a framework for the management of customers using examples of forms in a variety of industries.