Don't crack open that old business textbook, because we got you covered!
On this episode of Digital Transformation Success, host and CEO, Priscilla McKinney, speaks with Rogier Verhulst, Senior Director at LinkedIn, and Marco Vriens, CEO of Kwantum, about the groundbreaking metric, Customer Surplus Value (CSV). As further described in the Harvard Business Review article entitled “Why You Should be Tracking Customer Surplus Value”, CSV measures how much customers would need to be compensated to give up a product or service, providing insights beyond the traditional Net Promoter Score (NPS).
While NPS has long been the standard for measuring customer feedback, CSV offers unique advantages: it provides concrete dollar values that executives can easily understand, it's less affected by cultural biases, and it's particularly useful for measuring value in digital and freemium products. When used together, these metrics tell a more complete story in behavioral marketing - for instance, AT&T's low NPS but high CSV indicates customers might be unhappy but find it difficult to switch providers.
"If your consumer surplus value is five dollars, but the consumer pays two dollars for it,” Vriens explains. “[Customers] are going to be happy because they're going to get more value than they're giving up. But if the consumer surplus value is two dollars, but they're paying five dollars, then you're going to have to wonder: are these customers going to stay customers?"
They also discuss LinkedIn's experience using CSV to evaluate premium versus free features, future applications in brand research, and how this methodology could revolutionize the way businesses measure the dollar value of brand associations built through advertising campaigns.
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