Customer equity is a concept that seems to have had its day in marketing. It arose, and it seems to me somewhat went away, relatively quickly. A 1996 article on the Harvard Business Review by Robert Blattberg and John Deighton lays out the idea of managing by a customer equity test. In many ways, this…
Category: Customers as Assets
Understanding The Value Of Customers
Before CLV had become a big thing in marketing strategy Francis Mulhern looked at the challenge of understanding the value of customers. There are a lot of good points in the article. Measurement Problems In Understanding The Value Of Customers One of the most obvious challenges is that the data to allow us to understand…
Customer-Based Corporate Valuation
I think the idea of using customer information in corporate valuation is a great one. As such, I am very receptive to work on customer-based corporate valuation. A 2005 paper in Management Decision I think well illustrates some of the challenges I have seen in this field. Lots of good ideas, some reasonable points, but…
Customer Centricity And CLV
Peter Fader is a major figure in the study of customers. Specifically, he is closely linked to the idea of how companies value customers and focus on serving the customers that are most important to the firm. His 2019 book with Sarah E. Toms, The Customer Centricity Playbook, looks at customer centricity and CLV. The…
Customer Centricity And Customer Equity
Customer centricity is a very good book. It is short and has an excellent point. You could read it in a long bath despite there being much to learn from it. So what then can we learn about customer centricity and customer equity from Peter Fader’s book? A Strong Start And Clear View Of Customer…
Angel And Demon Customers
Larry Selden and Geoffrey Colvin had a book back in 2003 that made quite a stir. It introduced the idea of angel and demon customers. This was a catchy way of explaining the notion that not all customers are profitable. Indeed, Selden and Colvin argue that customers should not all be treated the same. What…
Valuing Customers As Investments
I think of Sunil Gupta and Don Lehmann’s 2005 book, Managing Customers As Investments, as the third of the valuing customers books. (After Rust and colleagues Driving Customer Equity and Blattberg and colleagues, Customer Equity). It was written a few years after the others and I think that probably helps it read more cleanly. It…
A Customer Equity Balance Sheet
The book, Customer Equity, is a bit of a classic in the marketing field. It is an early attempt to refocus companies from products to customers, specifically through measurement of the value of the customer base. The authors introduce a lot of interesting new ideas. They have many admirably big swings and, to be honest,…
Valuing Firms Through Their Customers
The basic idea of valuing a firm through its customers is an excellent one. There was a collection of works looking to do this early in the millennium. This was partly motivated by the challenges of the dot-com boom. In this boom firms had high valuations but low profit (or more likely losses). The valuation…
What Drives Customer Equity?
Around the turn of the millennium, there was a lot of interest in the idea of customers as financially relevant. Thus work started to concentrate on the idea of customer equity. Customer equity was sometimes equated with the idea of customers as assets. This is an important aim (even though I have some measurement quibbles)….
