These days I get about 3 Social Media white papers a day and most of them are just empty self-promotional talk.
This day’s winner in the category of impracticality got into talking about measuring social media ROI and touted “customer lifetime value” as the primary method of measuring success.
When social media strategists say, “you should calculate customer lifetime value” as if it was “you should drink a glass of water” they actually say, “I heard that somewhere and it sounded good, want fries with that?”
Here’s what they’re not telling you:
Calculating customer lifetime value (CLV) takes large sets of data (customer), over extensive periods of time (6 to 12 months to 3 years, not quite a lifetime), multiple key performance indicators (value), and serious analytic brain-power. In the end the numbers that you’ll get will be scrutinized, and criticized. And in the time it will take you to finish you analysis a new media trend will be in full bloom and you missed the boat.
So CLV is not for beginners and strategists should not tout that as the primary method to measure marketing results, unless the business and the strategists have the capacity to build the appropriate analytics structure.
Otherwise, here’s a simple model to evaluate results:
We’ll talk more about measurements in a future post. In the meanwhile, watch out for overly-complicated promises of Social Media ROI measurements.