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The following was used as part of an internet advertising company's appeal to businesses: "Furniture Depot employed our internet advertising company to help. Since then its sales increased by 10% over last year's totals. Furniture Depot's success demonstrates how using our internet services can increase your profitability".
An internet advertisement company claims that its services can increase the
profitability of any company that uses its services. The company bases this claim
after Furniture Depot's sales increased by 10% over its last year's totals, because
Furniture depot used its services. This premise is unfounded because it lacks a lot
of supporting information.
First, increase of sales by 10% doesn't mean the profitability also increased by a
substantial amount. The case could be that the incremental cost that went into the
internet advertisement resulted in a net loss. Moreover, Furniture depot could
have advertised through other mediums like news paper and TV, which would
have resulted in increased sales.
Second, an increase of sales could have resulted because of more resident
moving into the neighborhood and may have nothing to do with any sort of
advertisement.
In sum, the internet advertisement company's claim of improving profitability based
on the given premise, not only lacks solid proof, but also may drive away potential
customers who are smart enough to know that the company is making
unsubstantiated claims.
The following was used as part of an internet advertising company's appeal to businesses: "Furniture Depot employed our internet advertising company to help. Since then its sales increased by 10% over last year's totals. Furniture Depot's success demonstrates how using our internet services can increase your profitability".
An internet advertisement company claims that its services can increase the
profitability of any company that uses its services. The company bases this claim
after Furniture Depot's sales increased by 10% over its last year's totals, because
Furniture depot used its services. This premise is unfounded because it lacks a lot
of supporting information.
First, increase of sales by 10% doesn't mean the profitability also increased by a
substantial amount. The case could be that the incremental cost that went into the
internet advertisement resulted in a net loss. Moreover, Furniture depot could
have advertised through other mediums like news paper and TV, which would
have resulted in increased sales.
Second, an increase of sales could have resulted because of more resident
moving into the neighborhood and may have nothing to do with any sort of
advertisement.
In sum, the internet advertisement company's claim of improving profitability based
on the given premise, not only lacks solid proof, but also may drive away potential
customers who are smart enough to know that the company is making
unsubstantiated claims.
