השווי החברתי של לקוחות

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השווי החברתי של לקוחות פרופ' ברק ליבאי, בי"ס לניהול ע"ש אריסון במרכז הבינתחומי

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השווי החברתי של לקוחות

  1. 1. 1Prof. Barak Libai
  2. 2. A moment of history2Prof. Barak Libai
  3. 3. Marketing Era : The product3Prof. Barak Libai
  4. 4. In the beginning, it was the age of the product• Or, actually a brand• And we created a marketing mix for it– The 4 P’s: Price, Place, Product, Promotion• And calculated “Brand Equity”4Prof. Barak Libai
  5. 5. • And when the data came , we began to better see how itworksProf. Barak Libai 5
  6. 6. Marketing Era : The customer6Prof. Barak Libai
  7. 7. And then came the “age of addressability”• “Customer Relationship Management”, “Customer CentricMarketing”• Better technology and available databases enabled us tofollow individual customers on a large-scale base– For the first time we could understand the consequences ofphenomena such as customer retention• And we could see that that “consumers are not created equal”7Prof. Barak Libai
  8. 8. 8Prof. Barak Libai
  9. 9. Prof. Barak Libai 9A “customer pyramid” for a firm that supplies cleaning systems andmaterials to organizations
  10. 10. So the individual customer increasingly became the unitof analysis• We began to calculate Customer Lifetime Value– The Net Present Value (NPV) of the future cash streams associatedwith a single customer– Increasingly used for fundamental marketing activities: whichcustomers to acquire, which service to give to which customers, whichadvertisement to give to whom10Prof. Barak Libai
  11. 11. Marketing Era : The network11Prof. Barak Libai
  12. 12. And then came the Age of ConnectivityWe begin to realize that customers are a part of (smaller and larger)“communities” or social networks that largely affect their behavior12Prof. Barak Libai
  13. 13. Why today?• We know more– We have better access to customer connectivity data• Customer are more connected– Cellular– Email– Social mediaProf. Barak Libai 13
  14. 14. Increasingly the business environment is looking at the“social value of customers”• The value a customer creates by affecting the consumption ofothersProf. Barak Libai 14
  15. 15. 1. One has to take into account a “ripple effect” in the social system– The value of A should take into account both B and C2. Unlike lifetime value, it is not additive– Social value of A=B+C, Social value of B=C, C should not be counted twice !• Customers may buy later on anyhowProf. Barak LibaiACBSocial value is more problematic to assess than purchase-based lifetime value
  16. 16. You cannot really understand customer social value until you “killthe customer”• And see the effect on the lifetime value of other customers• Agent based model simulations based on real network datacan help in that.Prof. Barak Libai 16
  17. 17. Social value fundamental issues:Prof. Barak Libai 17
  18. 18. 1) The aim of marketers in the context of word ofmouth is to create higher customer social valueNot only conversations, impressions, “likes”, engagement, buzz,etc. !Prof. Barak Libai 18
  19. 19. Yet, in order to calculate social value we need tounderstand conversationsWho talks to who about what and whenProf. Barak Libai 19
  20. 20. 2) Expansion, acceleration and social value• In a competitive environment two fundamental processesintegrate to create social value:– “expansion” (getting new customers that would not buy otherwise)– “acceleration” (making would-be customers purchase early)• In the context of “seeding” the market for a new product the profit fromexpansion is stronger compared to that of acceleration (~70% vs. 30%).– However, the stronger the brand is, the higher is the role of acceleration.Prof. Barak Libai 20
  21. 21. 3) Social value is still largely created offlineYet much of recent academic and business knowledge on socialinteractions comes from online dataThis is a fundamental issue towards better understanding of thecreation of social valueProf. Barak Libai 21
  22. 22. 4) “Influencers” will create higher than average socialvalue• The extent will vary, yet targeting influencers (opinion leaders,influentials, hubs) for a new product can bring considerablymore profit than targeting random customersProf. Barak Libai 22
  23. 23. However, in the absence of data on connectivity,targeting “revenue leaders” may be a good idea• Revenue leaders- our best (potential) life time valuecustomers.– The “heavy users”.• People tend to be in a social network with people like then,which will be reflected in consumption– Thus, revenue leaders will tend to be with other potential revenueleaders– Will create social value not because of the number of people affected,but because WHO is affected.Prof. Barak Libai 23
  24. 24. In a more general sense – think of lifetime value of thepeople who receive the word of mouthOne piece of good news: Customers acquired via word ofmouth tend to have a larger lifetime value than customersacquired via advertising/promotionsProf. Barak Libai 24
  25. 25. 5) The power of “when” for social value• For new products, the social value of an individual customer ismuch higher early-on in the product life cycle.• Not necessarily because they talk more or are more influentialthen.25Prof. Barak Libai
  26. 26. Prof. Barak Libai 26010020030040050060070080090010000 2 4 6 8 10 12Year since introductionLoss($) Indirect effectdirect effecttotal effectThe social value of customers at differentstages of the new product life (online bankingexample)Hogan, Lemon and Libai (2003)Direct effect-Lifetime valueIndirect effect-social value
  27. 27. Prof. Barak Libai 27Innovators and early adopters may bring more value viatalking than via buyingInnovatorsEarly adoptersEarly MajorityLate Majority Laggards0100200300400500600700800900Adopter CategoryAvergaeValue($)Direct effect (lifetime value)- $208The total value of customers (lifetime + social value)for different adopter categories- online banking
  28. 28. Interesting questions that rise• How do we want to invest in customer acquisition vs.retention over the product life cycle?• What is the implication of a competitor giving bad value totheir customers?Prof. Barak Libai 28
  29. 29. 6) The “negative social value” of a defection can besubstantialProf. Barak Libai 29• Social effects have been known for a while to occur in the adoption of newproducts• Recent research has showed their strength also in the case of defection ofmature products– And the patterns in terms of social network effect are similar to that of adoption– For cellular products the increase of the hazard of a defection given a defection in one’sclose social network can come up to 80%
  30. 30. 7) Products can also have a “social value”30Prof. Barak LibaiEspecially in online environments
  31. 31. Consider the online interface which consumers face ineCommerce sitesProf. Barak Libai
  32. 32. This book “recommends” the purchase of other booksProf. Barak Libai
  33. 33. Prof. Barak LibaiAnd other books recommend this book
  34. 34. Actually this can be seen as a “product network”,for booksProf. Barak LibaiOestreicher-Singer &Sundararajan 2012
  35. 35. But not only booksProf. Barak LibaiDVD Recommendations – B&N.com
  36. 36. Prof. Barak Libai
  37. 37. Prof. Barak Libai
  38. 38. • The value of a product in a recommendation system38Prof. Barak LibaiProduct AIntrinsic valueIncoming valueOutgoing ValueNetwork Value (u) = Intrinsic Value (u) + Outgoing Value (u)
  39. 39. Prof. Barak Libai 39• Findings from the product network of 1M books in Amazon:– Bestsellers have a lower “network value” than Revenue– Low sellers (“Long Tail”) have a lower network value than Revenue
  40. 40. 40Prof. Barak LibaiWe should still always remember:If we do not give value to our customers, we will not getlifetime or social value.
  41. 41. Prof. Barak Libai 41

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