Gaining Leverage on Life-Time Value
You know engagement sells. That’s why you should take a look at a new analysis of customer engagement. It is consumer-oriented but your humble blogger found lessons for B-to-B marketers about engagement elements, channels, and measurement in the report.
Buyers aren’t seeking engagement for its own sake. They are looking to fulfill a need. But they consistently judge the key elements of engagement across channels according a study offered by Razorfish. Buyers want to feel valued. They want efficiency and they want to be able to trust the seller.
Your B-to B segment may not match the consumers studied, but online and mobile social media are not currently important engagement channels for consumers according to the Razorfish study. The survey indicated that the most important engagement channels are “transactional email, company websites, traditional word-of-mouth and face-to-face conversations with a company representative.”
Commonly touted online engagement measures fail to measure important elements of the engagement experience according to the study. You should question whether seller-centric measures like time spent, site visits, downloads, page views, search keywords and session length tell you how the prospect or customer feels about the engagement.
Engagement Channel Importance by Age Segment
(used with permission, Liminal: The 2011
Razorfish Customer Engagement Report)
You should factor “influence” into Life-Time Value (LTV) of a customer to weigh your engagement investment decisions according to the study. LTV is a metric long used in subscription, conference attendee and other direct marketing to estimate return on marketing spending. Your humble blogger has reported on how Paul Gillin at the Inbound Marketing Conference advocated the use of LTV in calculating the ROI of online social media. The Razorfish study proposes a different acronym but it makes sense to call the influence adjusted LTV “leveraged live-time value” (LLTV)
High-influence, high LTV (high LLTV) prospects and customers give you more return on engagement investment according to the study. Devoting extra resources to influential prospects and customers is hardly a new marketing idea. The report mentions Oprah Winfrey as an obvious target. In a business-to-business context, independent “thought leaders” industry luminaries, etc. are routinely cultivated. But looking at classes of influential prospects and customers is an extremely useful concept.
There are other angles on influence in consumer marketing. The authors of The Influence of Affluence (originally published as The Middle-Class Millionaire), Russ Alan Prince and Lewis Schiff posit that the “working wealthy” exert influence “far beyond their tax bracket” among consumers. In the B-to-B context aren’t the entrepreneurial “middle-class millionaires” also influential within their industries way beyond the scale of their companies?
The influence factor applies across channels. Inventive B-to-B marketers will want to look beyond online and mobile social media (the focus of the Razorfish analysis) for ways of identifying and quantifying influence; especially since neither the key elements of engagement nor the most important channels currently favor online and mobile social media.
B-to-B events incorporate the key elements of engagement identified in this report. Events make participants feel valued. Events are efficient sources of information and solid contacts. And unquestionably, events establish trust.
B2B events work through channels that people value highly. The real social interactions of events foster traditional word-of-mouth and provide opportunities for face-to-face conversations with company representatives.
You can use Leveraged Life-Time Value (LLTV) to rationalize what you intuitively know – that certain types of prospects and customers are worth high engagement investment. LLTV gives you new reason to invest in both new social media and in the original social media - face-to-face events.