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Tweet to buy: shifting from CLV to CNV



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CLV to CNV

Earlier this month American Express executed their Tweet to Buy promotion for discounted gift cards. This HBR article lays out the thinking behind American Express’ willingness to sell a $25 gift card for $15 to their cardholders that will Tweet their brand.  It also shows how this particular execution is likely to produce a low return on investment without a more specific focus on certain market segments – hence the shift from Customer Lifetime Value (CLV) to Customer Network Value (CNV).

This is an excellent illustration of a thought process that retailers need to go through to ensure they get a high return on a discounted offer.  There’s really no excuse today for not going through this exercise with any programs in the world of digital marketing.

 

 

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BlackBeltBobby Martyna said:
CNV is an interesting concept -- much harder to measure than CLV, but in theory, much more valuable.

First, although it is still nascent and working out some gaming issues, Klout, which measures online and social influence, allows marketers to send offers only to users with a minimum Klout "score". This approach would handle the objections the author makes regarding the potential return on their $10 investments.

Second, without a mechanism for backtracing the compelling tweets that spurred buyers to buy the card -- and no downstream tracking tracing in place, Amex can hardly know how to begin to measure CNV.

That said, there is an opportunity (for Twitter or others) to implement a mechanism for tracking CNV -- this would truly be valuable to marketers.

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