Question 1 Sonic Selection would like to put firm performance metrics in place for its sales managers, based off customer conversion rates, as they would like to reward the sales managers based on the rate at which users that browse the site end up purchasing tracks. The need for changing the incentive scheme has been driven by information recently published by the eCommerce Association around industry conversion rates. The eCommerce Association collects and analyses data from a broad range of companies involved with trading of goods or offering services over any electronic network, predominantly the internet. This incorporates all online stores, including digital music stores like Sonic Selection. The eCommerce Association has conducted a study on 312 e-commerce companies, which indicates that the expected conversion rate is 8%, with a standard deviation of 1.1%. This benchmark is far higher than Sonic Selections internal benchmark of a 5% conversion rate.

1.1 Given the recently published benchmarking information, Sonic Selection is well below the benchmark in terms of e-commerce conversion rates. What other factors, besides industry benchmarks, need to be considered when it comes to setting performance metrics? Name and briefly discuss at least 3 other factors. Your answer may not exceed the word limit.

1.2 Based on the information provided, and your answer to question 1.1, suggest a suitable conversion rate for Sonic Selection and justify your choice. Should it be higher or lower than the industry average? Your answer may not exceed the word limit.