Learning: ROI and Customer Lifetime Value

Audience at SXSW:

Here are books and links that will give any marketer or techie a basic framework for how to truly measure financial value.

Valuation – Measuring and Managing the Value of Companies

The classic MBA book – still focused on “the primary goal of a company is to return value to shareholders” – but the math and financial framework provides one of the more accessible lessons on how to value a company.

Measuring Customer Lifetime Value

A tool provided by Harvard Business School Press. It includes the discounted cash flow time value of money within the tool. No algebra needed.

Managing Customers for Profit

Professor V. Kumar explains how Customer Referral Value is more useful and relevant than Customer Lifetime Value, and explains the difference, constraints, and limitations of our more traditional world view.

His site is filled with additional research, calculators, and links.


SXSW: The ROI of Relationships

Here is the presentation:


I’ll be speaking and teaching geeks and marketers how to actually measure the ROI of relationships, during a time when ROI is completely under criticism, and attack. ROI fans, unite!

From the Dachis Group social business summit:

“What’s missing in most #social business attempts is a systematic link to metrics that matter.” @jbernoff

“We are at an inflection point, a social generation replaces spreadsheet generation.” @jobsworth

“ROI analysis for social software is a ‘fool’s errand’ – John Hagel


From SXSWi Conversations:

“All of you who just worry about metrics, numbers, roi, you’re going to die” @garyvee

The value is not inamassing Facebook fansits what you do with them.” – Forrester

All those who say, ROI measurement, yes we can, come join me tomorrow at 3:30.

Ballroom F, Austin Convention Center.



SXSW 2011: The ROI of Relationships

You CAN measure the ROI of relationships – personally, and professionally, and this seminar will show you how. No spreadsheets needed for this lecture, and only minimal algebra. Bring a cocktail napkin, a flair ink pen, and learn how to calculate the net present value of your future mate, your pet, or the 8,299 followers of your company’s Twitter feed. Yet ROI alone will not tell you the ultimate value of your relationships. What other indicators do you need to be looking at to predict whether or not you, your future mate, your pet, or your followers will be happy with the relationship in the long run?

Strong relationships depend on other factors – connection, a sense of fairness, health, humor, fun, the ability to learn and evolve together, and a sense of overall engagement with each other, and with life. At a more macro level, communities need to understand the equity they are building not just economically, but socially and environmentally as well. As the social graph reveals a huge volume of data about our actual relational behavior, we have an opportunity to pause for a moment: to consider the value system reflected in how we measure each other, ourselves, our relationships in the world. Participants will walk away not just with a clear and precise method for how to measure ROI, but also a holistic framework for measuring return on social behavior.

Vote for this panel at the SXSW panel picker.