What is customer equity? How can a company increase its customer equity?

Expert Solution

Customer equity is the total combined customer lifetime values of all of the company's current and potential customers. As such, it's a measure of the future value of the company's customer base. Clearly, the more loyal the firm's profitable customers, the higher its customer equity. Customer equity may be a better measure of a firm's performance than current sales or market share. Whereas sales and market share reflect the past, customer equity suggests the future. Companies should manage customer equity carefully. They should view customers as assets that must be managed and maximized.

Customer equity, the sum of all customer lifetime values, indicates future value, suggesting loyalty's importance over sales or market share, urging careful management.

Junaid answered 3 months ago

How can a company measure its brand equity effectively and increase its brand value?

Why is a brand important for a company? Discuss brand equity in your answer. How can a company measure its brand equity effectively and increase its brand value?

. Show how a firm can increase its cost of equity and cost of debt capital,...

. Show how a firm can increase its cost of equity and cost of debt capital, yet still come out with an overall cost of capital that is unchang

How would you increase equity in the market for health services? Can you increase both equity...

How would you increase equity in the market for health services? Can you increase both equity and efficiency?

Can a hotel or restaurant increase or maintain customer satisfaction after implementing its

Can a hotel or restaurant increase or maintain customer satisfaction after implementing its first revenue management program? Explain your answer.

In what ways, can a company increase its profit? Be as specific as possible.

Explain how a firm can modify their product line to increase customer satisfaction.

How can a company increase their click-through rate?

Explain how a marketing manager can utilize the “Customer Based Brand Equity” model to develop brands....

Explain how a marketing manager can utilize the “Customer Based Brand Equity” model to develop brands. Provide examples and discuss what a company needs to do to make sure that the product characteristics and brand image are in harmony and can be utilized effectively to establish and grow the brand equity.

What is a firm’s equity, and private equity? Can you also explain how a firm’s equity...

What is a firm’s equity, and private equity? Can you also explain how a firm’s equity grows using the balance sheet and income statement?

how can private equity fund protect its capital in an investment?

Question