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No 2000/6 - Paris, October 30, 2000
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  The 90/20 rule: 90% of online sales accounted for by only 20% of consumers who buy online

The 90/20 rule:
90% of online sales accounted for by only 20% of consumers who buy online

$1.8 billion worth of gross travel bookings for Travelocity for the first nine months of 2000.


Cyberdialogue, the eCRM solutions provider, recently conducted an analysis that reveals that the 80/20 rule should soon become a 90/20 rule online.

According to Cyberdialogue's analysis, only 20% of online shoppers account for 87% of the total consumer online sales market.

Another thing worth mentioning is that the top 20% of online shoppers spend at least $1.000 per year online.

Shoppers spending the most money online are likely to be affluent, educated, middle-aged and male.

As for its online behaviour, this group is much more likely than the average online shopper to buy high price-point items online (products and services).


Another point is that these top 20% online shoppers readily participate in reward programs, seek customer after-sale service by email and they might even change their mind about a specific brand after gathering some piece of information online.

This analysis shows, if some people still needed to be convinced, the key role played by a customer relationship in an Internet strategy.

According to Cyberdialogue's analysis, companies who want to be able to recognize which customers are making online purchases and how to keep them need to use eCRM tools in order to do so successfully.

Even though such eCRM tools is not always the best option (it does not work for eTourism "Sales Machine" sites, for instance), Internet offers many opportunities for those who want to improve customer relationship. But in most cases, at the time being, marketing tools are not used in the best possible way, if used at all.

An eTourism Sales Machine site should be fast and efficient, and should not bother the websurfer with data and form filling which are bound to put him off the service he was looking for on the site.

But there must be a way for these Sales Machine sites to keep their customers somehow.

Yet, most of the time, sites are unable to choose a business model and stick to it. As they want to keep everybody happy, they end up losing their specificity which is bad for the Web surfer who is no longer able to classify the site.

There is not only one but several answers to give the top 20 online shoppers and eCRM is only one of these answers.

This analysis points out how important eServices are if you want to keep customers.

This analysis also proves that quantity in terms of visitors is not the only key to success, quantity is much more important since you're now aware that nearly 80% of the online shoppers are only accountable for 10% of your turnover.

Knowing that, you realize that there is no need to spend huge sums of money in advertising campaigns, until you are well able to identify the top 20 online shoppers among your customers.

Source : Cyberdialogue

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    $1.8 billion worth of gross travel bookings for Travelocity for the first nine months of 2000  

Gross bookings for the third quarter only were $649.5 million for

Gross travel bookings for the first nine months of this year were $1.8 billion, almost 50% higher than bookings for all of 1999.

And yet, the company is still making losses, losses that were $3 million before intangibles for the third quarter of 2000 even though its total revenues were $53.4 million for the same period ($135.9 million for the first nine months of 2000), up 110% from the third quarter of last year.

Among the other interesting figures communicated by Travelocity, there is another point worth mentioning: overall membership rose to 23.4 million, up from14.8 million in the third quarter of 1999.

Bookings follow the same trend. Average monthly unique bookers were 509.000 in the third quarter compared to 264.000 for the same period in 1999.

As for the lookers-to-bookers conversion rate, it increased to 6.8% in 2000, compared to 3.8% in the third quarter of 1999.

Nonetheless, we can notice a slight decrease in this conversion rate, since it was 7.1% in the second quarter of this year but Travelocity gives us the following explanation: there was a decrease in flight availability in the third quarter of 2000 compared to the previous one.

Even though is ranked as one of the largest on and offline travel site worldwide because of its gross travel bookings that were $1.8 billion for the first nine months of this year, in my opinion, lookers-to-bookers conversion rate still remains the most interesting aspect of these quarterly results.

As a matter of fact, it proves that Travelocity was not only able to retain the level it reached in the second quarter of this year but is also shows that a site with a great customer service capability is well able to attract and retain a very large proportion of its customers.

Source: Travelocity

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