Customer Equity: Measurement, Management and Research Opportunities (Foundations and Trends in Marketing)

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. 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