Driving Customer Equity

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In their quest to become more customer-focused, companies often find themselves trapped in outdated systems and strategies shaped by a product-centered perspective. To facilitate this transition, marketing strategy experts Roland T. Rust, Valarie A. Zeithaml, and Katherine N. Lemon present a new model called "Customer Equity," aimed at maximizing the total lifetime value of a firm's customer base. Their Customer Equity Framework offers valuable insights for enhancing customer value. The authors introduce three key drivers of customer equity: Value Equity, Brand Equity, and Retention Equity, explaining how managers can develop strategies based on these drivers in straightforward language. They illustrate how to create competitive metrics to assess a company's Customer Equity against competitors and identify which drivers hold the most significance in various industries. Additionally, they guide managers in making strategic trade-offs regarding investments in these drivers and projecting financial returns. The book also features the Customer Pyramid, which segments customers by long-term profitability, and highlights the Internet as a crucial tool for Customer Equity, showcasing examples from companies like Intuit.com and Schwab.com. In today's one-to-one marketing landscape, grasping how to enhance Customer Equity is vital for any firm, making this work essential for marketing managers and anyone focused on increasing customer