BSC Young Boys choreography, 25 June 2014 | Photo: Sebastiano Mereu
There is an obvious relationship between the investment a company makes in a customer relationship and the return that investment generates (Grant, 2008:324). Kotler (2003:76) claims that the aim of customer relationship management is to produce high customer equity, which Rust, Lemon and Zeithaml (2004:110) define as the total of the discounted lifetime values summed over all of the firm’s current and potential customers. According to Blattberg and Deighton (1996:138), appraising customer equity is conceptually similar to appraising the value of a portfolio of income-producing real estate, and they add that the goal of maximising customer equity by balancing acquisition and retention efforts properly should serve as the star by which a company steers its entire marketing program.
In this article we will discuss the three drivers of customer equity…
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