Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Measuring and maximizing customer equity: a critical analysis

Measuring and maximizing customer equity: a critical analysis Customer equity, the asset value of customers, can be measured using different aggregate- and disaggregate-level approaches. The authors compare how customer equity is measured and maximized under various approaches. We find that, in the disaggregate-level approach, customer lifetime value is maximized by implementing customer-level strategies such as optimal resource allocation, purchase sequence analysis and balancing acquisition and retention spending. At the aggregate-level, improving the drivers of customer equity maximizes customer equity. A comparison of different aggregate approaches shows that, while an emphasis on retention is a common feature across approaches, conceptual differences in terms of accounting for existing customers and prospects, acquisition, and the projection period exist across the different approaches. The authors propose a hybrid approach, which addresses the issues and challenges in existing approaches and helps firms to measure and manage customer equity. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of the Academy of Marketing Science Springer Journals

Measuring and maximizing customer equity: a critical analysis

Loading next page...
 
/lp/springer-journals/measuring-and-maximizing-customer-equity-a-critical-analysis-sCtzMuYPyc

References (24)

Publisher
Springer Journals
Copyright
Copyright © 2007 by Academy of Marketing Science
Subject
Business and Management; Business and Management, general; Marketing; Social Sciences, general
ISSN
0092-0703
eISSN
1552-7824
DOI
10.1007/s11747-007-0028-2
Publisher site
See Article on Publisher Site

Abstract

Customer equity, the asset value of customers, can be measured using different aggregate- and disaggregate-level approaches. The authors compare how customer equity is measured and maximized under various approaches. We find that, in the disaggregate-level approach, customer lifetime value is maximized by implementing customer-level strategies such as optimal resource allocation, purchase sequence analysis and balancing acquisition and retention spending. At the aggregate-level, improving the drivers of customer equity maximizes customer equity. A comparison of different aggregate approaches shows that, while an emphasis on retention is a common feature across approaches, conceptual differences in terms of accounting for existing customers and prospects, acquisition, and the projection period exist across the different approaches. The authors propose a hybrid approach, which addresses the issues and challenges in existing approaches and helps firms to measure and manage customer equity.

Journal

Journal of the Academy of Marketing ScienceSpringer Journals

Published: May 5, 2007

There are no references for this article.