Customer Lifetime Social Value (CLSV)

One of the hallmarks of the digital revolution is the rise of the socially connected consumer. At the same time, the ability of companies to influence and measure social interactions between customers has grown tremendously. As a result, when evaluating the total value of each customer to the business, it is no longer sufficient to consider the value of a customer in terms solely of the discounted cash flows it generates through direct payments; It is also essential to consider indirect value. value take into account that caused by the social influence of the client. In this note, we develop a framework to measure and quantify the social value that a customer generates. We derive a simple expression for Customer Social Value (CSV) and show how to combine it with the commonly used expression for Customer Lifetime Value (CLV). The combined company is known as Customer Lifetime Social Value (CLSV). The note uses specific examples to illustrate key ideas and examine a variety of questions related to how customers create value for the company through their social interactions, such as shows and links to company reviews.

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