Customer Equity
This article covers meaning & overview of Customer Equity from marketing perspective.
What is Customer Equity?
The customer equity of a firm is defined as the present value of the total revenues that the customer base of the firm will generate in its lifetime. A company with higher equity is valued higher than the one with lower equity. The following three factors drive customer equity:
- Value Equity: This measures how the customer perceives the firm in terms of the product the quality, price and convenience. This is parallel to the concept of “value for money”.
- Brand Equity: This measures how the customer feels about the firm. This includes brand awareness, brand recall and the emotional connect of a customer with the firm.
- Retention Equity: This measures the tendency of a customer to be loyal to the brand. This can be measured by the loyalty programs, its reputation etc.
Browse the definition and meaning of more similar terms. The Management Dictionary covers over 1800 business concepts from 5 categories.
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