Customer Equity can help management: ·allocate marketing spending for long-term profitability, ·understand the connection between budgets, metrics and financial performance, ·provide a customer focused approach for measuring firm value, ·improve the productivity of CRM platforms by providing frameworks, tools and metrics Customer Equity reviews current models, offers a typology, and examines the fundamental question of whether a customer equity orientation can put a firm in a competitive advantage to other firms. The authors review models that can increase customer equity by optimizing each of its drivers - customer acquisition, customer retention, and add-on selling. Customer Equity is important reading for marketing managers, marketing researchers, scholars and students.
Author(s): Julian Villanueva, Dominique, M. Hanssens
Year: 2007
Language: English
Pages: 112
Introduction......Page 12
Models to Compute Customer Equity......Page 16
Definitions of Customer Equity......Page 17
Customer Equity Versus Brand Equity......Page 18
Building Complete Customer Equity Models......Page 21
A Typology of Customer Equity Models......Page 26
Future Directions......Page 38
Drivers of Customer Equity: The Acquisition Effort......Page 42
Optimal Acquisition Spending......Page 44
Identifying the Best Prospects......Page 46
Acquisition Budget Allocation......Page 48
Future Directions......Page 49
Drivers of Customer Equity: Customer Retention......Page 52
Determinants of Customer Retention......Page 53
The Relationship Between Customer Retention and Profitability......Page 57
Models to Estimate the Probability of Retention......Page 63
Customer Defections......Page 69
The Acquisition-Retention Interface......Page 71
Future Directions......Page 72
Drivers of Customer Equity: Add-on Selling......Page 76
Models for Product Offering Selection......Page 78
Predicting Individual Response to Add-on Offerings (Customer Selection)......Page 80
Estimating the Potential Value of a Customer......Page 82
Antecedents of Add-on Selling......Page 84
Future Directions......Page 85
A Framework for Marketing Customization......Page 86
The Objective Function to Maximize......Page 88
Targeted Pricing......Page 89
On the Optimality of Customer Equity Maximization......Page 95
Future Directions......Page 96
Conclusions......Page 98
References......Page 100
