Abstract
Customers are important intangible assets of firms. Customer equity (CE) and customer equity sustainability ratio (CESR) cannot only provide a crucial basis for measuring the growth potential of firms but also provide managers a reference standard to allocate the marketing resource. This empirical study discussed the CE measurement of a mobile payments aggregator. With the rapid development of mobile payment in China, it is very meaningful to calculate the CE of these aggregators as an emerging business pattern because calculating CE cannot only help the mobile payments aggregator evaluate its future business development but also help it to provide value-added services and generate service fee from its clients, i.e., the retailers. The main purpose of this paper is to calculate CE of a mobile payments aggregator generated from a specific retailer from the perspective of technology diffusion. Based on the Bass model and Rogers’ theory of innovation diffusion, we calculated CE and CESR for five segments, namely innovators, early adopters, early majorities, late majorities, and laggards. The results show that it is the early adopters and the early majorities who generate most of the profit and it is also these two segments that have the greatest growth potential in the future.
Highlights
Customers are important intangible assets [1,2,3,4] and sources of profits of the firms [5]
We provide a specific customer segment method according to the time of adoption of a new service and calculate customer equity on the basis of five customer categories, namely innovators, early adopters, early majorities, late majorities, and laggards
Customer equity (CE) is an essential metric to measure customer based assets and it can further provide a new tool for firm valuation instead of financial-based valuation
Summary
Customers are important intangible assets [1,2,3,4] and sources of profits of the firms [5]. As an important supplement to corporate financial indicators, customer equity (CE) and its derivative indicator, customer equity sustainability ratio (CESR), are measurements of the financial status of a firm’s customers and clearly reflect the future development trend and growth potential of the firm [6]. CLV refers to the net present value of profits that a customer can bring to a firm during his or her entire life of transactions with the firm [10,11]. Customer equity is defined as the sum of the lifetime value for all customers of the firm [2,12]. Bermes, and Horn [13] further proposed the concept of customer equity sustainability ratio (CESR), which is defined as the ratio of a customer’s (or all customers’) future CLV (or CE) to the customer’s (or their) total CLV (or CE).
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