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Social proof is a form of persuasion based on comparison and conformity. People compare their behavior and actions to what others are doing and will change to conform to do what their peers do.
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Related Experiment Video

Updated: Feb 6, 2026

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How to acquire customers on the Web.

D L Hoffman, T P Novak

    Harvard Business Review
    |February 24, 2001
    PubMed
    Summary

    Online retailers can optimize marketing spend by understanding customer lifetime value. Affiliate marketing and data analysis allow for efficient customer acquisition, unlike traditional advertising

    Area of Science:

    • E-commerce
    • Digital Marketing
    • Business Strategy

    Background:

    • Many online retailers overspend on customer acquisition.
    • Traditional marketing lacks clear ROI measurement.
    • Understanding customer economics is crucial for sustainable growth.

    Purpose of the Study:

    • To demonstrate an effective customer acquisition strategy for online retailers.
    • To highlight the benefits of affiliate marketing and data-driven decisions.
    • To challenge the notion that marketing spend is inherently wasteful.

    Main Methods:

    • Implementing an affiliate marketing program (BuyWeb).
    • Utilizing website data to calculate customer lifetime value (CLV).
    • Informing traditional advertising spend based on CLV data.

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    Main Results:

    • Affiliate marketing provides a performance-based, efficient acquisition channel.
    • Customer lifetime value analysis enables informed investment in broader advertising.
    • CDnow's strategy offers a measurable approach to marketing ROI.

    Conclusions:

    • Data-driven strategies, like affiliate marketing and CLV analysis, allow online businesses to effectively manage and optimize customer acquisition costs.
    • This approach provides a clear understanding of marketing effectiveness, contrasting with traditional advertising's inherent uncertainties.
    • CDnow's model offers a scalable solution for profitable online retail growth.