Customer equity


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Customer equity

  1. 1. 1visit: www.studyMarketing.orgManagingCustomer Equity
  2. 2. 2visit: www.studyMarketing.orgYou can download this presentation at:www.studyMarketing.orgVisit for morepresentations on Marketing, Strategy,Innovation, and Branding
  3. 3. 3visit: www.studyMarketing.orgCustomer EquityCustomer EquityCustomer equity is defined as thetotal of the discounted lifetime valueof all the firm’s customersIn other words, a firm is only as goodas its customers think it will be thenext time they will do business withthat firm.
  4. 4. 4visit: www.studyMarketing.orgThree Drivers ofThree Drivers ofCustomer EquityCustomer EquityValue EquityBrand EquityRetention Equity
  5. 5. 5visit: www.studyMarketing.orgThree Drivers of Customer EquityThree Drivers of Customer Equity• Value Equity : the customers objectiveevaluation of the firm offerings• Brand Equity : the customers subjectiveview of the firm and its offerings• Retention Equity : the customers view ofthe strength of the relationship betweenthe customer and the firm.
  6. 6. 6visit: www.studyMarketing.orgValueEquity
  7. 7. 7visit: www.studyMarketing.orgValue Equity is the customersobjective assessment of the utility ofa brand, based on perceptions ofwhat is given up for what is received.
  8. 8. 8visit:• Quality :How does the customerevaluate the quality of the firmsofferings?• Price : How attractive is the price?• Convenience : How convenient is it todo business with the firm?Drivers of Value Equity
  9. 9. 9visit: www.studyMarketing.orgBrand Equity
  10. 10. 10visit:• Brand Equity is the customers subjectiveand intangible assessment of the brand,above and beyond its objectivelyperceived value.• This evaluation is shaped by the firmsmarketing strategy and tactics and isinfluenced by the customer through lifeexperiences and associations with thebrand.
  11. 11. 11visit:• Builds awareness and attractscustomers• Build emotional connections withcustomers• Reminds customers to repurchaseThe Role of the Brand inBuilding Customer Equity
  12. 12. 12visit:• customer brand awareness• customer attitude toward the brand• customer perception of brand ethicsDrivers of Brand Equity
  13. 13. 13visit: www.studyMarketing.orgRetentionEquity
  14. 14. 14visit:• Retention Equity is the tendency of thecustomer to stick with the brand, aboveand beyond the customers objectiveand subjective assessments of thebrand.• It focuses on the relationship betweenthe customer and the firm, based uponthe actions taken by the firm and by thecustomer to establish, build, andmaintain a relationship.
  15. 15. 15visit:• Does the customer benefit from relationshipwith the firm?• Does the firm benefit from its relationshipwith the customer?• Does the customer stand to lose if therelationship is discontinued?Retention equity considersquestions such as:
  16. 16. 16visit:• Loyalty programs (frequent purchase/rewardprograms)• Special recognition and treatment programs• Affinity (emotional connection) programs• Community programs• Knowledge-building programs (learningrelationship or structural bonds)Drivers of Retention Equity
  17. 17. 17visit: www.studyMarketing.orgIf you think this presentation useful, please consider telling othersabout our site : www.studyMarketing.orgSource of Reference:Roland Rust, Valarie Zeithaml, and Katherine Lemon,Driving Customer Equity : How Customer Lifetime Valueis Reshaping Corporate Strategy, Free Press