Innovation’s ROI and the “New” CLV

Clara Shih, author of "The Facebook Era," recently blogged about the innovation ROI of online engagement and how it contributes to a new definition of customer lifetime value (CLV). Companies like Starbucks and Dell are utilizing the Internet to create open forums for the public to share ideas and feedback. MyStarbucksIdea and Dell Ideastorm in particular post "ideas" and have customers help to prioritize these ideas and add personal opinions… for free. After all, who knows what the customer wants better than the customer? Both Starbucks and Dell have implemented ideas largely formulated by these Web-based forums – ideas that have raked in revenue. Keeping this in mind, the old definition of CLV (present value of future cash flows from a particular customer) should be completely revamped to include: the customer's level of influence, the size of the customer's network and community, and sales resulting from the customer's idea contributions.


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Brian Swann
VCU Brandcenter / Creative Brand Management / 804-690-7048
www.brandcenter.vcu.edu / swannbr@gmail.com