Add social value to your customer's financial value
November 20, 2007
Forrester has some interesting insights on the growing importance of social value in determining customer value:
- As marketers, we find ourselves relying more and more on consumers to impact others in their purchase decisions. Evaluating customers based only on their business or financial value - such as my much-loved Life Time Value, or an operation's ROI - is *has been*.
What's social value?
I've simplified it into 3 components:
1) A customer's knowledge and involvement - in short, his level expertise and interest in the category and brand.
2) How he participates, and the value of his connections - what social activities is he involved with (both on and offline) and where (on what networks is he active). The value refers to the value of the connections themselves: are the communities more tightly-knit or diffused, are they public or more intimite.
3) The number of contacts the customer has in each network.
Your CRM or loyalty program members and active web users would be great starting points for social scoring.