You are the sum of your network: valuing a customer and not-so-stupid marketing
Posted by KevinE at 5/8/2008 6:39 AM and is filed under uncategorized 
I recently started teaching a class for Stanford University’s Continuing Studies program. http://stanford.stupidmarketing.com
For the record, this is not an easy task. Take sixty five people of varied marketing experience and professional backgrounds, give them limited study time, and attempt to keep them engaged and you’ll understand what I mean.
For the record, it’s significantly more challenging than lecturing to a room full of engineers, or MBAs, or executives. The students in my class are motivated and sharp.
This means they come up with very hard questions and truly brilliant observations.
For example, one student, Anurag Singh, recently found this link on Ebay, wherein “Andrew Barron” was (at least claiming to be) attempting to auction off his Twitter account. (Twitter is another social network, like Facebook, LinkedIn, Yahoo Groups, etc).
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=160229562828
Let’s ignore the obvious marketing for a moment (Andrew dramatically increased attention to his profile by creating an innovative event / proposition), and instead consider Andrew’s offer as though he were serious.
What a great practical demonstration of the next level of customer value!
But let me back up a moment and provide some context.
One of our greatest challenges, as marketers, is to separate wheat from chaff – to understand which prospective customers have value (and are worth our time), and which will never increase our company’s revenues.
In the early days, prospective customer value was primary purchase value: how much will this person buy from me, how quickly?
As marketers became more sophisticated, we began to assess lifetime value: how much will this person buy from me, over the course of their total set of transactions with me?
But we’ve only begun to scratch the surface of recognizing and measuring a tertiary value – network value: how much will the people this customer strongly influences buy from me?
Andrew’s auction attempted to explicitly recognize (and value) at least one aspect of that tertiary value. Good on you, Andrew!
Similarly, smart marketers will recognize that network value, find ways of assessing it (referrals and affiliate programs are a good start, or use more complex programs merging CRM with social networking), and use it.
So while smiling at bit at Andrew’s auction, ask yourself: do you have a way of measuring your prospective customers’ network value? Maybe you should start…
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blog.stupidmarketing.com is now also a podcast! Click on the "play" arrow...
Please buy my book. buynow.stupidmarketing.com -- and tell your friends
For the record, this is not an easy task. Take sixty five people of varied marketing experience and professional backgrounds, give them limited study time, and attempt to keep them engaged and you’ll understand what I mean.
For the record, it’s significantly more challenging than lecturing to a room full of engineers, or MBAs, or executives. The students in my class are motivated and sharp.
This means they come up with very hard questions and truly brilliant observations.
For example, one student, Anurag Singh, recently found this link on Ebay, wherein “Andrew Barron” was (at least claiming to be) attempting to auction off his Twitter account. (Twitter is another social network, like Facebook, LinkedIn, Yahoo Groups, etc).
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=160229562828
Let’s ignore the obvious marketing for a moment (Andrew dramatically increased attention to his profile by creating an innovative event / proposition), and instead consider Andrew’s offer as though he were serious.
What a great practical demonstration of the next level of customer value!
But let me back up a moment and provide some context.
One of our greatest challenges, as marketers, is to separate wheat from chaff – to understand which prospective customers have value (and are worth our time), and which will never increase our company’s revenues.
In the early days, prospective customer value was primary purchase value: how much will this person buy from me, how quickly?
As marketers became more sophisticated, we began to assess lifetime value: how much will this person buy from me, over the course of their total set of transactions with me?
But we’ve only begun to scratch the surface of recognizing and measuring a tertiary value – network value: how much will the people this customer strongly influences buy from me?
Andrew’s auction attempted to explicitly recognize (and value) at least one aspect of that tertiary value. Good on you, Andrew!
Similarly, smart marketers will recognize that network value, find ways of assessing it (referrals and affiliate programs are a good start, or use more complex programs merging CRM with social networking), and use it.
So while smiling at bit at Andrew’s auction, ask yourself: do you have a way of measuring your prospective customers’ network value? Maybe you should start…
----
blog.stupidmarketing.com is now also a podcast! Click on the "play" arrow...
Please buy my book. buynow.stupidmarketing.com -- and tell your friends
Download | Duration: 00:00:00
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