Brand Marketing Insight
LTV Inflation - The Social Factor
By Ted Curtin
Social Media’s Exponential Effect on Lifetime Value
In his book "Six Pixels of Separation” – which is a great book that I’ve quoted before - Mitch Joel reminds us that “In a world where we’re all connected, one opinion quickly turns into everyone’s opinion.”
Gone are the days when we were able to project the relatively simple forecast of purchases over a typical lifecycle to come up with a neat and tidy dollar value that any one customer potentially represents. Influence be dammed! Where once we were able to calculate a customer’s expected Lifetime Value (sometimes called Long Term Value), with some degree of statistical confidence, the potential influence that social media injects into the equation now has exponential ramifications – for good or bad.
Ask companies that have successfully integrated social media into their corporate strategy and they'll tell you just how beneficial it is. When it's good, it's great! The ability to promote and leverage positive comments or experiences shared by real customers is a testimonial dream come true! But ask someone that's been caught off guard by an onslaught of negative feedback and the inability to respond, and they'll tell you about how they wish they stayed in school! Social media definitely has a magnification effect.
The solution – Don’t wait until there’s a problem to get your business involved with social media marketing. It doesn't hold much promise as a reactionary tool to address a problem or issue. Those attempts fail at best - backfire at worst! Social media is grounded on trust and influence. The more established you are, the more developed your network of followers and contributors are, the more reputable your track record of honest dialog and exchange is. As such, the more credible your position will be when you push forward all the great things being said - or have to push back potentially negative feedback. With an established presence and level of online trust you are in a perfect position not just to defend your position but to do so with the support of your online following.
Noted customer relationship and trust-based selling expert, Charles H. Green refers to the potential for “Extraordinary exchanges" that can take place when a company actively listens to its customers in the social media space.
The good news is that the costs are super low; the barriers to entry are minimal from both a time and personnel stand point. The investment in your online reputation will pay very high dividends by supporting your existing advertising and PR efforts while giving you a more deeply engaging channel to talk about the great things your company is doing.
Let Ted Curtin inspire your marketing efforts and help your company realize your brand's full potential, more fully engage your clients, and increase your profitablility. Ted Curtin is available for Speaking and Corporate Training opportunities through i-Marketing Services, Inc.