Welcome to Brilliant Reads. This week we’re looking at what customer satisfaction really costs, how to build a news site in eight weeks, and the profitability of MailOnline.
The high price of customer satisfaction (Sloan Review)
This new report from MIT’s Sloan Review challenges the assumption that highly satisfied customers are good for business.
The authors of the report found that the relationship between customer satisfaction and customer spending behaviour is surprisingly weak. Changes in customer satisfaction levels explained less than 1% of the variation in changes in their share of category spending.
They uncovered three critical issues that have a strong negative impact on translating customer satisfaction into positive business outcomes:
- Improved satisfaction can increase sales revenue, but the additional costs frequently outweigh the benefits. For example, lowering prices might improve customer satisfaction and boost sales, but can have an impact on profitability.
- Given that higher satisfaction levels are believed to result in higher customer spending, you might expect a strong positive relationship between satisfaction and market share. However, the research found that high satisfaction is a strong negative predictor of future market share.
- The research indicates that knowing a customer’s satisfaction level tells you almost nothing about how she or he will divide their spending among different brands.
How Trinity Mirror built Ampp3d in eight weeks (Martin Belam)
If you’re not already familiar with it, Ampp3d is a new site from Trinity Mirror, which focuses on socially shareable data journalism. In this post, Martin Belam gives an interesting account of how he and his team got the site up and running in just eight weeks.
At the heart of the project was a small core team of just three people. Martin wrote a product spec and a content strategy, a designer created a mobile-first design, and a developer built it on top of WordPress. Three weeks into the project, a working test site was up and running. The small team ensured that there was a laser focus on delivery, and that as much time as possible was spent on doing, rather than organising. Additional help was drafted in as and when needed. Another key factor in being able to work so quickly was having support at a senior level – the general manager of the Mirror Online was an important ally, securing buy-in and clearing obstacles.
How much money does MailOnline make from all that traffic? (Popbitch)
Sticking with the publishing theme from our last story, this article from Popbitch looks at the profitability of the huge amount of traffic MailOnline gets. It might be speculative, but it’s still an interesting read on the cost and sustainability of this particular content model.
The MailOnline gets:
- 160 million unique users a month
- 26 million page impressions a day
- £20 from an advertiser for its cheapest ad
- £41 million profit per year.
According to Popbitch, based on the pageviews and one ad per page at the lowest cost, MailOnline should be earning £189 million from advertising – over 4.5 times what it actually makes.
So where is that ad revenue going? According to Popbitch, a lot of it could be going on the cost of producing the content itself – MailOnline posts an amazing 750 new articles a day. On average, each article will only bring in about £150 from ad revenue. Each article costs an estimated £60 to produce, just in terms of journalist and image fees, before things the cost of bandwidth, office space, or star columnists like Liz Jones or Samantha Brick. All of which makes the Mail’s target of reaching £100m in profit look very ambitious.
What’s it actually like living with Google Glass? (Kernel)
In this article, Greg Stevens explains what it’s really like to live with Google Glass…
Kimono is an interesting new tool that lets you build your own APIs in seconds, and create apps without having to code. We created a basic app for Brilliant Noise blog posts in less than five minutes. If you give it a try we’d love to see what you do with it.