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(Graham Brown mobileYouth) How much is a young mobile owner worth?

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If value is based only on current spending then youth have a lower value than adults mobile owners. If value is, however, based on inclusive metrics that consider all the value youth create for the organization (inc. future value and indirect values such as word-of-mouth marketing and product development insights) then low spending youth may be more valuable than high spending adults.

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(Graham Brown mobileYouth) How much is a young mobile owner worth?

  1. 1. How Much is a Young Mobile Owner worth? - 03-10-2011PDF downloaded from mobileYouth® - http://www.mobileyouth.orgHow Much is a Young Mobile Owner worth?by admin - Thursday, March 10, 2011http://www.mobileyouth.org/post/how-much-is-a-young-mobile-owner-worth/<- Read More mobileYouth FAQsOverviewWe recently looked at this question at the Mobile Youth Workshop "What is a Young Mobile User Worth?"(members only access).This question is often asked in the context of justifying a business case for youth. Youth value depends on themetrics used to define value within the organization.Defining ValueIf value is based only on current spending then youth have a lower value than adults mobile owners. If value is,however, based on inclusive metrics that consider all the value youth create for the organization (inc. future valueand indirect values such as word-of-mouth marketing and product development insights) then low spending youthmay be more valuable than high spending adults."Value" is subjective. Are you measuring revenue or profit? Youth may provide less revenues but higher profit peruser.To answer this question we need to first understand what we are asking here:Which is the more revealing question? How much spending money do young people have? What is the value of a young person (compared to adults)?Youth Value - Revenues vs ProfitIf you are interested in value and profit then we need to consider the question in this context. In investment terms itis like buying a stock on the basis of its price rather than indicators of real value (for example Price EarningsGrowth multiples). Google, as an example, is far more "expensive" than a beat up stock like Satyam but there arereasons why Google trades at 100x Earnings whereas Satyam only 4x. Investors rate Google as a high-growth stock Investors see the lifetime value of Google as a lot higher Investors pay the premium because of the strategic value of Google (for example, it would always make a good acquisiton - if anyone could afford it)ARPU vs TVPUIn the context of youth consider this: ARPU - how much money youth spent last month TVPU - the Total Value of that youth to the companyValue considers the following elements page 1 / 2
  2. 2. How Much is a Young Mobile Owner worth? - 03-10-2011PDF downloaded from mobileYouth® - http://www.mobileyouth.org ARPU - money spent last month Cost of managing that account (how do youth and adults differ?) Earned media benefits (how do youth and adults differ in their referral behavior?) Innovation benefits (how do youth and adults create value in terms of product development?)Our latest youth mobile research provides sample ARPU / TVPU comparisons and concludes that while ARPUmay answer the "do young people have money?" question it may not be the right question to be asking. Highspending customers may not be the most profitable.Objections & Myths: Youth want everything for FreeCertainly, youth have limited resources and are more price sensitive than other customers but the idea that theywant it all for free, as exposed by the survey research data, is a myth. We found that the notion of "free" often isconfused with other marketing issues, for example: There are key psychological drivers that shape youth behavior such as The 3 Key Pain Points and free is not one of them. When brands lose focus of what youth want they reduce the appeal down to price. This makes marketing a lot more short term focused and ultimately ineffective. Youth, for example, are willing to spend $400 on an Iphone but will compare text packages that costs $4 and $6 respectively. In the latter example, the focus is on price and therefore not on the 2 key driver of youth behavior.Objections & Myths: Youth are FickleIt is right to assume that young people are not loyal towards your brand or any brand for that matter. But its quiteincorrect to call them fickle. Young people are loyal to what a brand does for them. In other words what matters isthe social currency that your brand or product or service provides. Your brand provides the required social currencywhen it fulfills the fundamental need to belong and be significant.How do you figure out what this social currency is? Answer: Co-create with young people. They know what theywant better than you and I. When they put in their inputs into a product or service that is being offered by yourcompany, you have a winning product.Find out more: Youth co-creation case studies for mobile brands page 2 / 2

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