Driving Customer Equity
How Customer Lifetime Value Is Reshaping Corporate Strategy
The authors' Customer Equity Framework yields powerful insights that will help any business increase the value of its customer base. Rust, Zeithaml, and Lemon introduce the three drivers of customer equity -- Value Equity, Brand Equity, and Retention Equity -- and explain in clear, nontechnical language how managers can base their strategies on one or a combination of these drivers. The authors demonstrate in this breakthrough book how managers can build and employ competitive metrics that reveal their company's Customer Equity relative to their competitors. Based on these metrics, they show how managers can determine which drivers are most important in their industry, how they can make efficient strategic trade-offs between expenditures on these drivers, and how to project a financial return from these expenditures. The final section devotes two chapters to the Customer Pyramid, an approach that segments customers based on their long-term profitability, and an especially important chapter examines the Internet as the ultimate Customer Equity tool. Here the authors show how companies such as Intuit.com, Schwab.com, and Priceline.com have used more than one or all three drivers to increase Customer Equity.
In this age of one-to-one marketing, understanding how to drive Customer Equity is central to the success of any firm. In particular, Driving Customer Equity will be essential reading for any marketing manager and, for that matter, any manager concerned with growing the value of the firm's customer base.
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Driving Customer Equity
Choose a format:
- Free Press |
- 304 pages |
- ISBN 9780743205900 |
- February 2001
Read an Excerpt
Chapter One: Beyond Brand Equity
The business world is increasingly organizing itself around customers rather than products. This is an inevitable reaction to a series of historical trends. Customer focus requires a new approach: managing according to Customer Equity (the value of a firm's customers), rather than Brand Equity (the value of a firm's brands), and focusing on customer profitability instead of product profitability. In fact, as we will see in Chapter 2, a slavish devotion to product profitability can be hazardous to a company's health.
From Brand Equity to Customer Equity
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