Driving Customer Equity : How Customer Lifetime Value is Reshaping Corporate Strategy

About this book

In their efforts to become more customer-focused companies everywhere find themselves entangled in outmoded systems metrics and strategies rooted in their product-centered view of the world. Now to ease this shift to a customer focus marketing strategy experts Roland T. Rust Valarie A. Zeithaml and Katherine N. Lemon have created a dynamic new model they call "Customer Equity" a strategic framework designed to maximize every firms most important asset the total lifetime value of its customer base. 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 companys 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