Social Customer Lifetime Value
In marketing textbooks, Customer Lifetime Value (CLV) is defined as "the present value of the future cash flows attributed to the customer relationship," and is calculated something like this:
CLV = (Sale value) × (Estimated Number of times customer will reorder)
[adjusted for Net Present Value]
However, this doesn't tell the whole story. Social media is so commonplace now that customers carry influence far beyond their own wallets. A single customer who never buys much from you might still be your most valuable asset — if they tell everyone they know about your brand.
That's where Social Customer Lifetime Value (SCLV) comes in. The formula expands the traditional model:
SCLV = CLV + CRV
Where CRV is Customer Referral Value — the monetary worth of the referrals and advocacy a customer generates. CRV itself is a combination of Social Capital (the reach and trust a person has within their network) and their likelihood to advocate on your behalf.
Brian Solis has written extensively on Social Capital, describing it as "the currency of digital citizens." The more social capital someone holds, the more weight their recommendation carries. A customer with high social capital who actively recommends your product can be worth far more than a high-spending customer who stays silent.
Traditional metrics like Net Promoter Score capture advocacy intent, but they don't quantify the value of that advocacy. SCLV attempts to bridge that gap — factoring in both the direct revenue a customer brings and the indirect revenue generated through their influence on others.
As social CRM tools evolve, measuring CRV becomes more feasible. The challenge is no longer whether social influence matters, but how to assign it a meaningful number.