However with social CRM's capability to centrally store data that measures and reports on social media activities, there comes a need to revisit how we measure the value of our customers on the basis of two primary actions that they are actively performing -
- Referring actions - Like, share, recommend existing products and services resulting in Customer Referral Value
- Innovation actions - Co-create new products and services resulting in Customer Innovation Value
Customer Referral Value:
With customers liking, sharing, recommending, influencing our products and services, we need to add the customer's referral value (CRV) to the current CLV metric. (sources: definition by Daniel, Oracle's Tara Robert)
So CLV 2.0 or social CLV looks something like this:
CLV 2.0 = CLV + CRV,
where CRV is Customer Referral Value.
Customer Innovation Value (new metric):While a very large percentage of users recommending our products and services, there is also a small yet relevant base of customers willing to co-create our next product or service (ref: Starbucks, Dell). These are truly high value, high potential customers. Companies that are able to strengthen relationships with such customers will gain sustainable competitive advantage. And this is the future of competition!
So CLV 3.0 would look something like this:
CLV 3.0 = CLV + CRV + CIV,
where CIV is Customer Innovation Value.
So how do you think companies can measure CIV? Is there a science to it yet?
And should companies tweak their loyalty programs to reward customers who have made contributions of outstanding significance to a company's profitability, measured in terms of monetary, social, and innovation value? Maybe call it "Customer Lifetime Value Rewards" :) ?... what do you think? (Pardon the analogy to Grammy's Lifetime Achievement Awards!)