Unleash the Power of Employee Lifetime Value

A Research Summary for Marketing Leaders

Major Issues Facing Marketing Executives

As our global economy migrates from a production-based economy to one built on information and service delivery, organizations are seeking ways to leverage the intellectual capital and performace of their people. Marketers in particular are looking for compelling differentiators that help build a unique value proposition for their business.

A key opportunity for marketing leaders is to seek instances where their investments can be amplified by tapping into their employee audience. Often overlooked, employee populations, when engaged and loyal, can provide an accretive value to both internal and external marketing efforts.

What This Research Has Revealed

The study, Employee Lifetime Value: Measuring the Long-Term Financial Contribution of Employees, found that an employee’s contribution to the success of an organization can be identified through a quantitative measure of long-term financial value. This approach helps to realign employee value (and the many opportunities to increase it) as a critical, long-term investment in an organization...rather than merely a line-item cost. 

Further, this study promotes that investments to increase employee engagement, loyalty and commitment to one’s employer enhances the long-term value realized by the organization.

As for marketing leaders, strong pressure exists to prove return on investment with every marketing or advertising dollar spent. Often built into these calculations is the expectation that a certain long-term, tangible value is established for the brand as a result of such investments. Similarly, the Employee Lifetime Value (ELTV) calculation affords an organization the same opportunity when evaluating its most valuable asset – people.

Compelling data supports this research and its relevance to marketing field:

  • 85% of a company’s assets are related to intangible capital such as knowledge and human talent. (Brookings Institute)
  • Only 20% of global CMOs believe they have succeeded in getting their employees fully on board with their organization’s corporate culture. (From Stretched to Strengthened, 2011 IBM CMO study)
  • 75% of global CMOs believe marketing must manage brand reputation within and beyond the enterprise. (From Stretched to Strengthened, 2011 IBM CMO study)
The Employee Lifetime Value Model
Ideas for Applying This Research to Your Business

It may appear on the surface that ELTV is a topic reserved for those in Human Resources. However, savvy marketers know that an employee audience represents an invaluable pool of brand advocates, provided that the internal culture and external brand are in synch. Here are a few examples of how to improve ELTV while improving the impact of your marketing efforts.

  • Involve a broad range of employees in the design of internal and external marketing initiatives. Just as important as the Voice of Customer, leverage the Voice of Employee. As is evidenced by this study, such involvement creates high morale, excitement and commitment within the organization.
  • Connect the dots between internal and external messaging. Clear, consistent messaging provides the right foundation for aligned employee culture and behavior with customer expectations.
  • Support company employee engagement programs. Partner with your Human Resource organization to understand and influence the design of a company-wide employee engagement program. Consider devoting a portion of your marketing budget to specific employee-facing initiatives that link internal and external brand advocacy actions.
Research Basis

This paper is based on the December 2007 research study Employee Lifetime Value: Measuring the Long-Term Financial Contribution of Employees, conducted by Dr. Frank Mulhern, Northwestern University, and produced by The Forum: Business Results Through People and the Performance Improvement Council of the Incentive Marketing Association.

Copyright © 2012, The Forum: Business Results Through People.

About the Forum The Forum: Business Results Through People, (formerly Forum for People Performance Management and Measurement) affiliated with Northwestern University, is an organizational trust for thought leadership advocating that the most effective way business leaders can create and sustain organizational value is through their partnership with people. The Forum promotes a people-centered leadership approach by: providing relevant, provocative, and actionable academic research; creating a platform for leaders to dialog, network and benchmark practices; delivering ideas for practical action and experimentation; and, building and supporting a community of champions for people-centered leadership.