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Managing Customer Relationships Using Customer Lifetime Value and Customer Equity Metrics
Published in Madhu Arora, Poonam Khurana, Sonam Choiden, Performance Management, 2020
In customer relationship management, the generation of customer equity is the foremost goal of the company. As discussed, customer equity is the sum of the discounted customer lifetime values of both the current and the future customers of company. The metric is an indicator of not only the future performance, but also the existence of the company. Customer lifetime value and customer equity act as guideposts to crucial strategies of the company, by keeping customer at the centre of all decisions. They are, in fact, indispensable metrics for a long-term, sustainable relationship with the customers. CLV and CE metrics have a strong positive influence on the financial results of the company, and hence its position in the marketplace. Therefore, firms should continuously strive to diminish the acquisition costs, strengthen the retention rates, and augment the profit earned per customer.
Exploring Smartphone Improvements Based on a Hybrid MADM Model
Published in Gwo-Hshiung Tzeng, Kao-Yi Shen, New Concepts and Trends of Hybrid Multiple Criteria Decision Making, 2017
The idea of Customer equity (D1) might not be well known in all fields; therefore, additional discussions on this dimension are provided here. Customer equity, proposed by Rust et al. (2000), regards existing customers as valuable assets from the marketing perspective. There are three main criteria in this dimension: (1) Value equity (C1), (2) Brand equity (C2), and Retention equity (C3), briefly defined in Table 11.1. The ultimate goal of customer equity is to maximize the profits of a company by satisfying its customers’ needs; to reach this goal, a company should optimize its resource allocation from the viewpoint of its customers.
Sustainability and customer equity: Evaluation of citing networks and contributions
Published in Journal of Global Fashion Marketing, 2019
Juran Kim, Yang Sun, Kyung Hoon Kim, Seungmook Kang
This study indicated that successful sustainable performance achieved through economic, environmental, and social practices can boost customer equity in terms of brand equity, value equity, and relationship equity. Customers have always been the focal subject in marketing. Customer equity is a blessing for successful businesses in the industry because it allows firms to be truly customer-centered, a fact that is applicable to various industry settings (Rust et al., 2004). Changes in a firm’s customer equity are changes in its current and future customers’ lifetime values that result from the frequency of category purchases, the average quantity of purchases, and brand-switching patterns related to the firm’s contribution margin in the industry (Rust et al., 2004). Thus, research on sustainability and customer equity should be emphasized as key successful marketing features.