Redefine your high value customers - add the social dimension.

Like my flights to and from Barcelona, this blog post is rather late...

On Friday morning, I spoke about the need for us to reconsider customers on a social level.  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*. 

I called for marketers to integrate a second dimension - the social value - into their thinking.  What's social value?  I've simplified it into 3 components:

1) A customer's knowledge and involvement - in short, his level of 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. 

I'll soon publish the score card with examples.  The most important challenge for marketers:  understanding and mapping what customers are doing *socially* is still terribly hands on.  The best bet for marketers with an established customer base - ask them.  Your CRM or loyalty program members and active web users would be great starting points for social scoring. 

The new high-value customer is what I've called  *Ambassadors* - those customers with both high financial value AND high social value.  Ah yes, even in this new connected world, financial value should remain a key focus - with social value laid on top. 

Comments

re: Redefine your high value customers - add the social dimensi

sooo.... you are saying that financial backgroud is the key to becoming more socialy associated? Basically saying if you dont have money then your word is nothing as pose to someone that is very rich making is alloud to give their input into what goes on. - sounds like its the beginning of what i like to call... nequal- the only way to make a point is by owning property AND owning YOUR business.- money talks

re: Redefine your high value customers - add the social dimensi

As important as social networking is, will you simply ignore the older population which controls considerable buying power? I find that age is the determinant of computer comfort.

re: Redefine your high value customers - add the social dimensi

I completely agree with this post. I also believe measuring many elements of your metric are hard given the existing infrastructure and tools available to marketers but with ‘will’ comes ‘outcome’. One way of identifying ambassadors is through existing email marketing programs:- If a customer sits on the top percentile of users who clicked from the email to the product page and also buys frequently he/she is probably an ambassador- If a customer sits on the top percentile of users who open emails from you then they are probably ambassadors- If a customer sits on the top percentile of users who forward emails to the most friends they are probably brand ambassadorsRishi

re: Redefine your high value customers - add the social dimensi

Institute of Management Technology (IMT) Ghaziabad, one of the top ten business schools in India, is known for academic excellence, research contributions, executive development and industry interface worldwide. It is organizing the International Conference on Technology and Innovation in Marketing on 18-19 April, 2008.The International Conference on Technology and Innovation in Marketing invites conceptual and empirical papers, case studies and conference papers from academicians, practitioners, scholars and students related to the conference theme. Competitive and working papers, research articles and case studies on marketing and management topics broadly and conceptually related to the conference theme are invited. Conference submissions are invited on the following sub themes and tracks:TECHNOLOGY IN MARKETING• E-Marketing• Leveraging Technology for Customer Profitability• Technology enabled marketing• Marketing Technologies• INNOVATION IN MARKETING• Innovation diffusion and adoption• Bringing Innovations to market• New Product Development and ManagementFor further details,Visit:http://www.imt.edu/ictim2008/index.asp?page=about.htm(We have taken the liberty of posting this on your blog because the subjects of interest for both the blog and the conference are the same. We thank you for your co-operation.)

re: Redefine your high value customers - add the social dimensi

I look forward to seeing the score card, Mary Beth!

re: Redefine your high value customers - add the social dimensi

Hmm...marketers have always considered the social value of consumers. In the past they were called "early adopters" "role models" or "advocates". So in addition to having the money to buy the product marketers craved clients who would help to sell the stuff through their social influence ...this is the tupperware party model which has now been adopted by wii for its "alpha moms". the social parameters are now different and the scorecard will be a welcome value add