How do we measure the total value brought in by a customer to a firm through social media? This presentation follows our research to create a metric called the total customer value and identify what drives customers to follow, influence and make purchases through Twitter

1. Who talks, and Whom to talk to? Understanding the Total Value of a Social Media Customer A Research Report on Social Media Marketing By Vikram Bhaskaran, Director of Products, GoJeeno

2. Why Measure Total Customer Value? Introduction Marketing Today Social Media and the Diffusion of Innovations Information, Influencers and Profitability The Need to Measure Profitability Aligning Social Media to Business

3. Marketing Today All Customers are Firm-Acquired ‘Push’ acquisition strategies Focus on maximizing firm-centric nature of Permission Marketing Social Media ‘Memberships’ such as Twitter Followers and Facebook Fans Based on Hub-and-spoke Philosophy with Firm at focal point of information disbursement

4. Business focus continues to rely on Hub-and-Spoke information strategies, with the firm acting as the focal information source. Firm’s Marketing Efforts Consumers Traditional Customer Acquisition Philosophy Information Channel

5. Social Media and the Diffusion of Innovations Implications of the Relevance Paradox Customers talk amongst themselves Intra-consumer relationships are a key factor in individual purchase decisions Source: http://en.wikipedia.org/wiki/Diffusion_of_innovations Source: http://en.wikipedia.org/wiki/Diffusion_of_innovations

6. In Other Words… How Marketers View Consumer Networks What Consumer Networks Actually Are

7. Benchmarks in Social Media Marketing Number of Conversations Shares, Likes, Comments, Replies and ReTweets Number of Unique Memberships Fans, Followers But how aligned are these metrics to Core Business Objectives?

11. Allocate more resources to high value customers

13. Issues with Individual Profitability in a Social Media Setting Overlooks Customer Attitudes Attitudinally Loyal customers are not specifically accounted for Fails to leverage on Word of Mouth Low value customers might be acting as bridges carrying information to their high value friends

14. Measuring Total Customer Value The Influence Component Measures the degree to which the influencer plays a role in an influencee’s purchase decision The Individual Profitability Component Measures the monetary value of the influencee’s purchase Influence Effect of customer “θ” Number of Children/ Influencees 𝐶𝐼𝐸𝜃= 𝑖𝜂01+𝐶𝐼𝐸𝑖𝜌𝑖 Number of Parents/ Influencers of Child ‘i’

15. Getting to Total Customer Value

17. Calculated based on Distance-Weighted average information flow rateBrand Identity Total Customer Value Customer Equity Brand Equity

18. The Three Stage Model of Influence

19. Hypotheses and Preliminary Findings (Detailed Explanation in the appendix) *Collected on a sample of 1780 users across Twitter, totaling over 230,000 conversations.

20. Some Interesting Results More conversational users were not necessarily more influential Users’ Share of Total Conversations had a inverted U relationship with TCV

21. Additional Analysis and Next Step Identifying High Value Customers Seeding Information with Key Players Empowering High Value Customers with Information and Platforms Harvesting increased TCV and Customer Equity

22. Thank You Who are we? http://www.gojeeno.com More Info? http://blog.gojeeno.com Questions? ask@gojeeno.com

23. Appendix Hypotheses, Findings & Explanation

24. Generosity Is the measure of reciprocity in social connections “Does following someone increase the chance of them following you?” Yes. We measured a linear relationship, indicating that following somebody has a significant positive impact on them following you!

25. Network Compatibility Do two people talking similar topics have a greater chance of forming a social connection? Yes! We observed a strongly positive linear relationship, empirically validating this effect, known as homophily (or ‘birds of a feather’ effect) in our data samples.

26. Existing Clout Do celebrities have a greater chance of acquiring fans and followers than others? Unfortunately, yes. Celebrities and rockstars still seem to have their sway in acquiring followers. However, these celebrities do not seem to have any significant difference in the degree to which they influence an individual.

27. Activeness Compatibility Do two people who are active (online) at the same time have a greater chance of being influenced by each other? Yes. But not linearly. Just being online at the same time greatly boosts the chances of influencing someone, but the effect does not increase much with the number of hours.

28. Message Stickiness Does information in a topic discussed by an individual ‘stick’ with him/ her better? Yes. And we measured this effect to be strong and positive.

29. Conversational Diversity Conversation diversity- does the variety of topics spoken by a talker/ listener have an effect on how some information influences them? For the host (talker), talking a varied number of topics resulted in an initial boost in influence, but talking too many different topics ended up diluting the effect. To the listeners, the fewer topics they discussed, the more influenced they were when they received information on one that they did discuss.

30. Number of Influencers Do more influencers have a greater or lesser effect on information impact? Yes. As the number of influencers increase, the chances of being influenced increases aggressively till a point, and then becomes almost constant.