Dimensions and Implementation Drivers of Customer Equity Management (CEM)—Conceptual Framework, Qualitative Evidence and Preliminary Results of a Quantitative Study

Abstract

SUMMARY Customer equity has become a major marketing goal in many industries. In the existing literature on customer equity, there is a strong emphasis on measuring customer equity (or customer lifetime value), while there is a lack of research on how to manage customer equity and how to implement a systematic Customer Equity Management (CEM). In this paper, based on theoretical considerations as well as on qualitative and quantitative research applying confirmatory factor analysis, we identify three dimensions of Customer Equity Management structuring a firm's CEM activities: analytical CEM, strategic CEM and operational CEM. Further, three types of CEM implementation drivers are identified which represent determinants of the three CEM dimensions. We develop measures for both the three CEM dimensions and the three implementation drivers. These measures help companies evaluating their status regarding CEM and represent the basis for empirical studies regarding the determination and effects of CEM.