Estimate the monthly economic value to consumers as a result of (a) revenue improvement, (b) cost reduction. (See exhibit 9; information on 4 customers; handout)

2. Estimate of customer acquisition cost is $1500. Are there other costs incurred by AnswerDash?

3. Is the value (economic value - cost of fees) the same for AnswerDash as it is for customers?  Why?

4. Which strategic option would you select? Provide rationale

5. How would you price AnswerDash's services? (consider bases for pricing, pricing levels/tiers, payment schedule, commitment period, any others to build a sustainable pricing structure) 

 

AnswerDash Exhibit 9 Typical E-Commerce Gross Margins by Overall Revenue 1.16 Gross Margins (by Overall Revenue) 45% 40% 35% 30% 25% 20% 15% 10% 5% N = 413 $0 - $10K $10K $100K $100K $IM WOL$ - WL$ WOOLS WOLS Median (50th Percentile) Mean (Average) 8L$- WOOL$ Source: MarketingSherpa e-commerce Benchmark Study, 2014, http://www.marketingsherpa.com. 516-106