Customers’ Close Social Community and Influence Play a Significant Role in Purchasing Decisions and Defining Customer Value
Mobile Asia Congress, Macao, SAR of Republic of China – November 19, 2008 – Xtract Social Links’ new feature, Social Revenue, measures the value that a mobile subscriber brings by influencing his or her close social community in mobile purchasing decisions. With Social Revenue, mobile operators can estimate their customers’ value more accurately than with any other method used on the market today.
Consider, for example, an individual with large social community consisting of high ARPU customers versus another individual with a smaller social community consisting of low ARPU customers. Clearly, from a return on investment point of view, the individual having a large social community with high ARPU customers should be the focus of marketing activities for the mobile operator.
Our friends, family and social communities influence greatly our decisions to purchase goods and services. Often, we ask our friends for recommendation on which phone model we should purchase or on whether they have been satisfied with the new service provider. Word of mouth travels and has an impact on our decisions that is stronger than pure marketing and advertising by brands. Studies show that word-of-mouth is the most powerful selling tool, and 78% of people trust the recommendation of other consumers [Source: Trust in Advertising, A global Nielsen consumer report, October 2007].
“Companies are constantly trying to identify the revenue, profits and costs directly related to a customer. However, the traditional customer value measures do not take into account the social value that a customer brings”, says Hanna Kettunen, Product Manager at Xtract. “This leads to either overestimating or underestimating the real value of a customer.”
Xtract Social links takes into account whether a customer is influential or not when measuring how much that individual is worth to the company. In addition, not only the level of influence but who that influence can be inflicted on plays a role. With Social Links’ capability to estimate customers’ social revenue, mobile operators can include the indirect social revenue generated by a customer into the equation, therefore estimating much better the real customer value.
