Introduction
In early March 2000, Jeffrey Steinberg (MIT Sloan, SM ’91) was reevaluating his marketing plan for MotherNature.com. Steinberg, the Chief Marketing Officer, joined MotherNature.com 13 months earlier. During that period, the company had been successful raising capital, building a well-known online brand and recruiting a solid management team. MotherNature.com was considered one of the front-runners to capitalize on the huge online health market. Furthermore, during the Christmas season of 1999, e-commerce sites had begun to fulfill the sales expectations that had long fueled bullish investing in web-based ventures. However, despite improved sales figures, stock prices fell during the first quarter of 2000 for firms in both the health-related market as well as touted e-commerce players such as Amazon.com, Buy.com, and Pets.com. Like their counterparts at these firms, management at MotherNature.com began to turn its attention to long-term prospects and profitability. Steinberg continued to focus his efforts on three areas:
• Methods of attracting and retaining online customers
• Development of a marketing plan that offer high Returns On Marketing Investments (ROMI)
• Creating, using, and modifying models to quantify Customer Lifetime Value (CLTC)