Abstract

This study is about customer equity as a new marketing system. Customer equity’s basic premise is straighforward: The customer is a financial asset that companies and organizations should measure, manage, and maximize just like any other asset. Customer equity management is a dynamic, integrative marketing system that uses financial valuation techiques and data about customers to optimize tha acquisition of, retention of, and selling of additional products to a firm’s customers, and that maximizes the value to the company of the customer relationship throughout its life cycle. In the last two decades, managerial trends have tended to focus on either cost management or revenue growth. Customer equity management balances the two, creating market-based growth while carefully evaluating the pofitability and return on investment of marketing investment. Customer equiy management is built around three core strategies: acquisition, retention, and add-on selling. Every marketing activity affects an acquisition, retention, or add-on selling effort, or a combination of them. Keywords: Customer equity and customer life cycle.

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