Book Description
Internationally acclaimed business gurus and best-selling authors Don Peppers and Martha Rogers kicked off the CRM revolution and changed the landscape of business competition with their classic bestseller, The One to One Future. Now, in Return on Customer, they have written an even more revolutionary book, redefining the very concept of what it means to be “profitable” as a business.
Virtually every manager agrees that a company’s most vital asset is its customer base – the lifetime values of all its current and future customers. Yet when companies track their financial results, they rarely take into account any change in the value of this critical asset. As a result, managers remain blind to one of the most significant factors driving genuine, lasting business success, and instead become preoccupied with achieving short-term financial goals.
Return on Customer is the first book to focus on how firms create value, not just by driving current profits, but by preserving and increasing customer lifetime value. In a powerful blend of theory and practice, Peppers and Rogers demonstrate how to create shareholder value more efficiently by concentrating on Return on Customer(SM), a revolutionary business metric focused on a company’s scarcest resource – customers. By paying close attention to Return on Customer, companies can improve their profits while still conserving and replenishing long-term enterprise value.
Relying on their years of experience working with many of the world’s leading companies, Peppers and Rogers take readers far beyond marketing, sales, and service. Return on Customer will revolutionize how companies think about their basic competitive strategy, product development efforts, and even the issue of business ethics and corporate governance.
Return on Customer(SM) is a registered service mark of Peppers & Rogers Group, a division of Carlson Marketing Group, Inc.
“To remain competitive, you must figure out how to keep your customers longer, grow them into bigger customers, make them more profitable, and serve them more efficiently. And you want more of them.
Unfortunately, the financial metrics you learned in business school are not easily adapted to account for the value companies generate from this scarce resource, with the right balance between current-period sales and customer lifetime value. But striking that balance is necessary if you want to know whether you’re better off investing in customer acquisition, or in product development, or opening new stores, or plant efficiency, or better qualified personnel, or more service, or cost reduction. While you may believe in your heart that a particular decision creates shareholder value, there’s no financial metric currently available to tell you how much shareholder value you actually created, or even whether you created any at all.
But Return on Customer can help you. Return on Customer is a breakthrough financial metric that can quantify the actual shareholder value you are creating (or, possibly, destroying) with your various business actions and initiatives.”
—from Return on Customer
Customer Reviews:
Moving mountains isn't easy.......2006-09-16
Thirteen years ago, Peppers and Rogers' "The One to One Future" moved customer status from that of corporate pawn to valuable partner. Ensuing books - theirs and others - refined and facilitated that strategy.
Now "Return on Customer" justifies the customer a seat and powerful vote on the board. It provides principles, compelling logic and financial rationale that management, analysts and investors can utilize, develop and apply within their corporation. Moving mountains isn't easy, "Return on Customer" goes a long way to fuel that shift.
More daft nonsense from the people behind the CRM fiasco.......2006-07-03
So many managers read the 1-1 rubbish and wasted millions on CRM systems that were ill conceived and poorly managed.
And now the same people take their old 1-1 idea and add customer lifetime value (LTV). While there's no arguing that LTV is important, the authors do not illuminate how it works or why it's important. The book could have delivered its message in a 5 page article.
A real problem, and a practical one "where do these numbers come from" is left unanswered. It's frustrating and disappointing that the Peppers & Rogers buzz-marketing machine has deflected so much attention to themselves and away from better books on similar topics.
Suggested reading:
- Customer Equity (Blattberg)
- Marketing and the Bottom Line (ISBN: 0273661949)
- Marketing Payback (ISBN: 0273688847)
Poorly written, lack of substance, over-stretched on one single term and impractical.......2006-03-04
Except the very equation of ROC which is a natural extension of ROI, and chapter 12 on data privacy issue that are quite unique in themselves, it is by far the worst book of its kind I had read within the last 30 days, amongst them "Technology and Customer Service" by Paul Timm, "Customer Share Marketing" by Tom Osenton, "The Dollarization Discipline" by Jeffery Fox, "Loyalty Rules" by Frederick Reichheld and "The Customer Loyalty Solution" by Arthur Hughes. I quoted those names not to boast anything, but to express my strong disappointment and frustration against this book or the authors, that I really feel being cheated of my valuable time and price of the book. I sincerely recommend you to look for something much better, which is so easy to find, if you truly want to learn CRM.
Disappointing.......2006-02-23
This shall be an interesting short article not a book. Too much padding. Any high school grad can easily summarize it in a one single A4 page. Disappointing since written by serious people.
Managing Your Customers as Investments, an Amazon book by GUPTA and LEHMAN is uncomparably better.
Peppers and Rogers Deliver A Fresh Perspective on Customer Value.......2005-12-10
There's so much written out there about customer loyalty, and so much of it is the same song n' dance. Fact is, so few of the loyalty gurus go to the place of bridging the vision and the tactics. Don and Martha have taken the tried-and-true tenets of customer value and customer loyalty and wrapped some measures around them so that executives, shareholders, and board members can begin understanding--and measuring--the value of their customer assets.
As with their other works, the authors offer a mixture of new ideas and real-world examples to bring their concepts home. The complexity of the work and thought required to understand not only customer interactions and behaviors, but there intentions, is explained via a clear and powerful framework that transcends marketing and advertising, and goes straight to the bottom line. I appreciated the book's organization, and the comprehensive end-notes were a nice annotation and background to the authors' thought processes and research.
Another successful work by two pioneers who will continue to propel customer focus forward!
Product Description
Two fundamentally different business models of capitalism are operating in the business world today. One is self-destructive and increasingly corrupt. The other is emergent, flourishing, and inspirational. The author explains the differences between the two and reveals the extraordinary results of the more successful model. Profit for Life draws on nearly forty years of research on the empirical connections between stewardship and profitability.
Customer Reviews:
Review of Profit for Life: How Capitalism Excels by Joseph H. Bragdon.......2007-04-08
Profit for Life shatters the old paradigm that success in business means sucking the life from people and natural resources by viewing both as dispensable commodities. By showing us how success in business--including big business--goes hand-in-hand with respect for human and natural communities, Bragdon frees us from the wrenching misconception that profit and citizenship represent a kind of zero-sum game.
Bragdon unites head and heart in one of the most uplifting books I have ever read. Profit for Life offers hope with a firm footing. I recommend Profit for Life to anyone with an interest in business management, strategic investment, or corporate citizenship.
Daniel D. Dutcher, J.D., Ph.D.
Project Director
The Clean Energy Group
Montpelier, Vermont
Book Review for Profit for Life: How Capitalism Excels.......2007-01-31
Book Review for Profit for Life: How Capitalism Excels
by Ann McGee-Cooper
How do you measure the value of servant leadership in business? How can we know it works? These have been two of the most frequently asked questions in our consulting practice over the past 30 years.
In Profit for Life, Jay Bragdon provides us with some compelling answers. He does this by setting aside much of the linear cause-and-effect thinking that drives business these days, and adopts a more rounded, holistic approach that gives us deeper insight into the firm.
The book is based on the experiences of 60 companies - Bragdon's "learning lab" - that broadly represent the industry/sector diversity of the world economy. Throughout the text he describes 16 of these pioneering companies, called the Focus Group. The distinguishing feature of all these firms is their effort to mimic living systems - in the ways they organize, manage and add value. This mental model is radically different from the traditional one that views the firm as a money making machine.
Although it may seem counter intuitive, the living system approach yields vastly superior results than the traditional one. For example, the average equity return of learning lab companies was nearly double the S&P 500 over the past decade; and their excess performance continues as this review is written. Bragdon expects such premium returns will diminish over time as the more effective methods of the living system model become copied and enter the mainstream. Nevertheless, these results are a strong affirmation of the milieu in which servant leadership normally operates.
Servant leadership, to Bragdon, is all about relationships. He says "relational equity" is the foundation on which companies build financial equity. When companies care about people and the things people care about, Employees become inspired and their inspiration cascades into everything they do, including their relationships with customers, suppliers and other key stakeholders.
The raison d'etre of these servant-led firms is value creation - value that permeates all relationships. Companies that excel at such value creation pursue a strategy Bragdon calls "living asset stewardship" (LAS). The fundamental premise of LAS is: Profit arises from life, and must therefore serve life if it is to be sustainable.
To understand the strategic value of living asset stewardship, Bragdon makes a critical distinction between living assets (people and Nature) and non-living capital assets (buildings, equipment and financial reserves). We see this in three contexts. First, people are closely bonded to Nature - genetically, physically and spiritually - in ways that capital assets are not. Second, living assets are the source of non-living capital assets. And third, because living assets are inherently creative and emergent, their value grows over time rather than depreciating as capital assets do.
The operating leverage in the learning lab and the 16 Focus Group companies resides in the human heart rather than in mechanistic financial gearing. This is supported by the fact that they generate consistently higher returns on equity while carrying substantially lower debt ratios.
Although traditionally managed companies have been adopting some stewardship practices in the past decade, Bragdon finds their approach differs fundamentally from those in his study. In the mechanistic view of these firms, stewardship is an add-on that is subservient to their drive for profit. By contrast, in companies that have adopted the living system model, LAS is deeply woven into the value creation process - reflecting the fact that they see themselves as "living" and therefore integral to, rather than separate from, Nature and society.
Profit for Life builds on the brilliant work of Arie deGeus, former coordinator of Group Planning at Royal Dutch/Shell, and Harvard biologist Edward O. Wilson. DeGeus' classic, The Living Company, noted that long-lived companies had a collective consciousness, were sensitive to their environments, tried to work in harmony with the world around them, and strove to leave a legacy to future generations. Wilson tells us this collective consciousness is an expression of humanity's deep affinity for life, which he calls "biophilia," and that our biophilic instincts have evolved over thousands of generations of natural selection.
In my work as a teacher of servant leadership, I would highlight the paradigm shift Bragdon describes. The mission of leaders in LAS organizations is to serve and grow their people because that is the source of the firm's liveliness and capacity for growth. As Robert K. Greenleaf said: "The first order of business is to build a group of people who, under the influence of the institution, grow taller and become healthier, stronger and more autonomous." That seminal quote is used twice in the book to describe the power and generative capacity of LAS.
I highly recommend this book and will be using it regularly in our practice.
Ann McGee-Cooper, Ed.D., Business Consultant & Executive coach
in the field of Servant Leadership & growing Learning Organization.
Ann McGee-Cooper & Associates, Inc.
An Extraordinary Book: A Must Read.......2006-11-26
I intend to recommend Profit for Life to all my current MBA students. Next fall I am team teaching an MBA core course that combines Operations Management and Managerial Accounting. I intend to make the case that your book should be required reading and part of the course.
I became familiar with the work of W. Edwards Deming in 1990 and attended one of his four day seminars a year later. I also began to follow Peter Senge's work and later read Margaret Wheatley's book, Leadership and the New Science. Tom Johnson's book, Profit Beyond Measure, has been required reading in my Advanced Managerial Accounting elective at the MBA level.
Bragdon's book has brought the ideas, theories, and concepts discussed by these individuals together for me in a way that I could not have imagined. More importantly, he has not only taken their ideas to the next level, but done it in a way that provides a tangible blue print for how to change our current style of command and control management with its focus on profit maximization to a LAS Theory of Management.
The use of the sixteen focus companies from the LAMP INDEX and the author's ability ability to clearly show the distinctions in their style of management from the traditional management models that continue to be taught in almost all business schools, and the success these companies have achieved not just financially, gives those of us hoping to change management education and core business curriculums a new hope.
Thank you for such an outstanding book.
Joseph F. Castellano
Professor, Department of Accounting
University of Dayton Business School
Excellent, highly readable information.......2006-11-18
This is not one of those lightweight business books that repeats its Chapter 1 message over and over. It's chock full of research-based information that anyone involved in the sustainability movement should have. The publisher is Peter Senge's non-profit, so if you're familiar with his excellent work over the years, this would make a great addition to your library. The author's passion for his subject is obvious from page one.
Book Description
How Starbucks became Starbucks and other secrets of branding success. Aimed at managers, nt just marketers, a famed consultant presents a powerful prescription for understanding, building, and sustaining brand equity. Duane Knapp demonstrates, from a management perspective, why "a company's brand is the most valuable asset it can have." he shows how the very best practitioners - contemporary household names like Starbucks, Citicorp, Whirlpool, Lexus, Hallmark, and others - shrewdly develop and maintain their brands even in the face of ferocious competition.
Readers can assess and improve their own efforts by adopting Knapp's five proven components of the Brand Mindset that is for brand success: Make a promise to the consumer; make all decisions with the brand in mind; make sure the entire company supports the brand's message; make the brand bigger than the business, and build one specific image for the brand and stick with it always.
Download Description
Aimed at managers, not just marketers, a famed consultant presents a powerful prescription for understanding, building, and sustaining brand equity. Duane Knapp demonstrates, from a management perspective, why "a company's brand is the most valuable asset it can have." He shows how the very best practitioners -- contemporary household names like Starbucks, Citicorp, Whirlpool, Lexus, Hallmark, and others -shrewdly develop and maintain their brands even in the face of ferocious competition.
Readers can assess and improve their own efforts by adopting Knapp's five proven components of the Brand Mindset that is for brand success: make a promise to the consumer: make all decisions with the brand in mind: make sure the entire company supports the brand's message: make the brand bigger than the business, and build one specific image for the brand and stick with it always.
Customer Reviews:
The Brand Mindset.......2003-10-23
Although I am owner and operator of a quaint establishment in a small suburban town, I wanted the community and the world to know about the image I was creating for my product. The Brand Mindset was the vehicle I used to transport my thinking and my product to developing the brand recognition I wanted. It was very informative and clearly instructive. Chapter four, "The Brand Promise" was particularly beneficial. The format , compared to other brand strategy books was superior in conveying the steps to establishing product recognition. An absolute for the serious entrepreneur.
The bible of bulding a genuine brand.......2002-12-09
The Brand Mindset is a must read for any company trying to build a genuine brand. Duane Knapp clearly and concisely guides his readers through the process of developing a blue print for success that will take them well into the future. His knowledge and expertise are invaluable, and his book has become required reading for everyone in our company. An excellent tool for any business!
The BrandStrategy Doctrine: Make It a "Way of Life".......2002-10-10
This book clearly, concisely, and thoroughly explains why a genuine brand is a "way of life" understood and lived by everyone in an organization--not just a superficial marketing or advertising ploy. One must "think like a Brand", make a BrandPromise, communicate, live, and leverage the Brand. A strategic planning mindset is emphasized. Numerous detailed examples and graphics are provided to illustrate key concepts underlying the thought process involved in a BrandStrategy Doctrine. This book is a blueprint for understanding and applying the concept of branding to an organization. Each chapter ends with a one-page action guide. The final two chapters cover topics not found in any other book on branding: branding on the Internet, with evaluation criteria for one's website, and specific tools to aid brand developers in staying connected with customers and stakeholders. These tools include quizzes, questionnaires, and checklists. No stone is left unturned to stress the importance of the brand in achieving excellent customer service, as each employee represents the brand. For example, how to answer the phone and how to most effectively communicate nonverbally are discussed, in order to "live the BrandPromise". This goes well beyond what I would have expected from a book on this subject. If you wish to buy only one book on branding from what is available, buy this one. It is comprehensive yet easy and fun to read, and makes not just the planning, but the execution and continual evaluation of a BrandStrategy seem quite "doable". After reading The Brand MindSet, I believed that any company could follow in the footsteps of other successfully branded companies.
The BrandMindset is a Must Read.......2002-06-02
I purchased The BrandMindset to use as a reference for a marketing project I was working on for my MBA program. However, I wish that I had this book when I was working as a marketing communications manager. The BrandMindset clearly illustrates why brand strategy must be incorporated into every business function. The book demonstrates why in today's competitive environment, a company's brand is crucial in providing product distinction. A brand's promise must be delivered in all aspects of the business, not just promoted in advertisements or logos. As a student, I especially liked the real-world examples and brand-profiles included in each chapter. They helped to present a clear picture of how this process is applied and proof of its success.
The treasure lies in the last chapter in which the author has provided several tools and sample documents for a company to use when mapping out their own BrandStrategy. Everyone from the executive to the receptionist should read this book, and I would strongly recommend it as a current resource to anyone studying marketing or management.
The Brand Mindset.......2001-11-21
The Brand Mindset by Duane E. Knapp is a very helpful tool in building a brand for a company. Mr. Knapp lays out the method to succesful branding in an easy to follow and easily referenced manner. The examples were very helpful and relevant.If you are considering examining your brand and what you are promising your customers, you should consult this book. I know that I have come away with a whole new view as to how my company's brand should be built.
Book Description
In their efforts to become more customer-focused, companies everywhere find themselves entangled in outmoded systems, metrics, and strategies rooted in their product-centered view of the world. Now, to ease this shift to a customer focus, marketing strategy experts Roland T. Rust, Valarie A. Zeithaml, and Katherine N. Lemon have created a dynamic new model they call "Customer Equity," a strategic framework designed to maximize every firm's most important asset, the total lifetime value of its customer base. The authors' Customer Equity Framework yields powerful insights that will help any business increase the value of its customer base. Rust, Zeithaml, and Lemon introduce the three drivers of customer equity -- Value Equity, Brand Equity, and Retention Equity -- and explain in clear, nontechnical language how managers can base their strategies on one or a combination of these drivers. The authors demonstrate in this breakthrough book how managers can build and employ competitive metrics that reveal their company's Customer Equity relative to their competitors. Based on these metrics, they show how managers can determine which drivers are most important in their industry, how they can make efficient strategic trade-offs between expenditures on these drivers, and how to project a financial return from these expenditures. The final section devotes two chapters to the Customer Pyramid, an approach that segments customers based on their long-term profitability, and an especially important chapter examines the Internet as the ultimate Customer Equity tool. Here the authors show how companies such as Intuit.com, Schwab.com, and Priceline.com have used more than one or all three drivers to increase Customer Equity. In this age of one-to-one marketing, understanding how to drive Customer Equity is central to the success of any firm. In particular, Driving Customer Equity will be essential reading for any marketing manager and, for that matter, any manager concerned with growing the value of the firm's customer base.
Download Description
Services will dominate our GNP in the new millennium, and in the service economy the customer is king. Brands will continue to be important, but the most important challenge facing businesses will be the successful cultivation of profitable customer relationships.
Now the authors, all customer service experts, introduce a radical model: the Customer Equity Framework, which changes a firm's old internal focus on price, promotion, product, and distribution to a new external focus on measuring, managing, and building Customer Equity. The drivers of Customer Equity include Value Equity, the customer's objective evaluation of the firm's products and services; Brand Equity, the customer's subjective product assessment; and Retention Equity, the customer's opinion of his or her relationship with the firm. The authors show how to measure each element, then reveal actions every firm can take to strengthen the performance of these key drivers.
Providing concrete tools like a Customer Pyramid, Driving Customer Equity will revolutionize the way companies look at customers. With important information for Internet marketers -- and insights into how important customer loyalty will be to Internet business success -- this is a groundbreaking look at how any business can retain its most valuable commodity: customers.
Customer Reviews:
The next edition should be much shorter.......2003-10-14
This book has a few great points, however it continues to assert them page after page after page. The writing reflects a group effort, as you will find yourself reading a definition that was already articulated in the immediately preceding section. Each small passage or section within the chapters reads like it's own 500 word essay, meant to read independent from writing around it.
Little clear quanatative methods are expressed, rather we are forced to endure a hodgepodge of graphs that belong in a high school classroom.
Like the graphs, this book was poorly written. The sections are confusing and painful to endure. All of the concepts could be presented in a more condensed fashion, and quantative methods addressed. Better works are out there, so save your money on this one.
Good book.......2002-08-30
This book shows you the importance of been a client focus organisation through ''value, brand and retention equity''. Also good for strategy.
Useful guidebook for emerging businesses.......2002-08-29
Since the beginning of the industrial revolution, companies have built an organization around their products. In the traditional corporate model, finance, marketing, information systems, and operations focus on the profitability of products rather than customers. In recent years, companies have attempted to become more customer focused but often lack the organizational structure and corporate strategy to succeed in this transformation. In Driving Customer Equity, Roland Rust, Valarie Zeithaml, and Katherine Lemon develop a conceptual framework to help companies reshape their corporate strategy to grow the lifetime value of their customer base, or "customer equity". Although the concepts and strategies in this book could, theoretically, grow customer equity, the lack of real world implementations offered in this book leave the reader unsure of the feasibility to existing firms.
Rust, et al., break down the customer equity strategy into four parts: examining the problems with traditional product-oriented strategies, defining the customer equity framework, developing a customer-centered strategy, and managing the customer equity strategy. Each concept within the customer equity strategy is clearly organized and explained. At the end of each chapter the authors provide a table of "key insights" matched to "action steps" for each insight. Throughout the book, these tables provide a high-level roadmap to implementing the customer equity framework.
Beginning with two important concepts, the "profitable product death spiral" and the "lifetime value of the customer", the authors build a good case for changing a company's focus from products to customers. The theory's foundation is that companies who remove unprofitable products from the marketplace may lose customers who purchase bundled products and therefore lose long-term profit potential. Rust, et al., argue that companies who focus on the value of the customer over their lifetime may choose to keep unprofitable products to maintain or grow their customer base and increase long-term customer equity.
The authors build on this basis by breaking down customer equity into three unique but interdependent areas - value equity, brand equity, and retention equity. Value equity of a company is "when what it offers matches what the customer expects and perceives value to be." The concept of value equity is used as the foundation of the customer's relationship with the firm. Brand equity is defined as the "customer's subjective and intangible assessment of the brand, above and beyond its objectively perceived value." Retention equity is defined as the "customer's tendency to stick with the brand, above and beyond objective and subjective assessments of the brand."
While none of these three concepts are new, Rust, et al., redefine these areas in terms of the impact, needs, and perceptions of the individual customer. The action steps at the end of these chapters, such as "Engage in marketing research to understand which definitions of value are relevant to your customers. Tailor offers to focus on different value perception," are mostly common sense. There are no novel gems of wisdom, but instead a woven fabric of simultaneous actions necessary for the customer equity strategy to work.
In subsequent chapters, the authors go on to develop a customer-centered strategy that tries to measure customer equity, evaluate the financial impact of different customer equity strategic decisions, and convince upper management that customer-centered strategy will be more profitable to the company. Each section is well written and again provides action steps. However, these steps, such as "Develop a uniform evaluation procedure for all improvement programs for increasing Customer Equity," are often very high-level or require very large investments in time or money.
The last few chapters investigate ways to manage customer equity through redefining market segmentation based on the profitability of each customer rather than demographic, geographic, or psychographic approaches. As a result of this new segmentation, the authors show that some customers who are actually a drain on the company's resources should be proactively removed from the customer pool, thus lowering costs. It may seem counter-intuitive to decrease customers, but the authors make a good argument and provide ways to remove the customers gracefully.
While the book is well written and clearly explained, there are a few problems with the implementation logistics for existing firms. Examples of successful shifts to customer equity strategy are scare and repetitious. Fed Ex, IBM, and banks are some of few real-world companies that are shown to have implemented parts of the customer equity framework. There is no example of a company who has adopted the entire customer equity strategy. Without at least one leader in this revolution, managers may hesitate to pick up the banner of customer equity.
Another complicating issue is the customer equity strategy must be implemented at all levels of the company simultaneously to be effective. Many of the action steps require a significant amount of time, money, and buy-in from upper management, as well as fundamental shifts in organization and company values. For a start-up company, this strategy could be incrementally implemented as the company grows, but for established organizations it is a daunting and most likely impossible task.
Rust, Zeithaml, and Lemon have described a very thorough strategy that will most likely become the standard of operation for new companies. The ideas expressed in Driving Customer Equity, taken as a whole, could grow value equity, brand equity, and retention equity. However, without a success story to rally interest, successful implementation for existing firms is out of reach unless the fundamental values of and dedication to the customer equity strategy are embraced by senior management, employees, and shareholders.
Customer Equity: Moves the reader fom consepts to numbers.......2002-01-08
I approached this book as a heavy consumer of marketing literature in general and customer lifetime value literature specifically. Based on previous readings my expectations were low. However, the book's basic messages pertaining to customers not products, services not products, identifying the three drivers of customer equity and finally, how to estimate the numbers fascinated me. Through Customer Equity the reader can learn about some of the fundamentals behind what drives a company's profitability. CEOs are not concerned about the 4P's of marketing. Their focus is on the overall recourses allocation in order to secure future revenue from current and future customers. This book recognizes this and provides the reader with a roadmap to the allocation of the marketing budget among three main drivers of customer equity, i.e. brand equity, value equity or retention equity. Customer Equity provides the reader with sophisticated tools to estimate the financial consequences of the alternatives before they are executed. The ability to estimate the impact of improvement in any of the three areas on customer equity, will in my mind regain marketers access to the CEO -an access they lost to finance and strategy in the 1980s. In an era influenced by customer relationship management thinking, Customer Equity is a must reader for enlightened managers.
Waves the flag, but doesn't offer much leadership.......2001-09-12
The book is fundamentally right on a key principle -- companies need to focus on customers, not products or even markets. They argue that long-term growth is based on creating customer equity, which is based, depending on varying circumstances, on value, brand and retention equity.
However, the book is a confusing mishmash that reads like it was written by committee. Points are redundant. There are three identical charts, for example, of the "profitability death spiral." The links between a theory we can all agree on -- customers are important -- and strategy that can impact operations and marketing are weak. And the calculations for tactics -- determining the right mix of value, brand and retention equity -- are incomprehensible, and I've got a background in accounting. They read like they were lifted from an academic article by one of the authors. The stories they tell to illustrate their points -- Priceline, Amazon -- are rehashes of the same story we've all heard so many times before. Bottom line: Good concept, some intriguing thoughts (re: a customer equity officer) but no roadmap on how to get from a good idea to actual results. A worthwhile scan, but not much more.
Customer Reviews:
A brilliant and practical book.......2006-07-07
Customer equity gurus Rust & Lemon provide a thorough explanation of customer equity, going far beyond their "Driving Customer Equity" book in detail. The relationship management/CRM sections reflect the expertise of Harvard guru Narayandas. A company can use this book to learn how to effectively implement the customer equity perspective in their company.
This book is not a how to.......2005-03-23
I had to use this book for an MBA CRM class. I can safely say that everyone taking the course dislikes this book. The book has a very narrow approach to CRM - based on one single academic study. In addition, this study (by the authors) seems very remote from actual business practices. For example, how could one collect reasonably and systematically the kind of data that are necessary to populate their model for decision making? Having been working in a CRM function of a large financial institution, I would call the authors suggestions ivory tower wishful thinking.
Book Description
This digital document is a journal article from Industrial Marketing Management, published by Elsevier in 2005. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.
Description:
How do a manufacturing firm's (supplier) relationship marketing activities lead to more profitable business-to-business (B2B) customers? This research proposes that a supplier's relationship activities develop a buyer's attentiveness toward the supplier, which, in turn, leads to profitable buyer purchasing behaviors. Findings from 119 buyer organizations support this contention, and, additionally, buyer attentiveness was found to have a stronger positive influence on favorable buyer behavior than does either buyer dependence or relationship length. This study contributes to our understanding of long-term buyer-supplier relationships in B2B markets.
Average customer rating:
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Capturing Customer Equity: Moving from Products to Customers
David Bejou
Manufacturer: Haworth Press
ProductGroup: Book
Binding: Paperback
 General
| Business & Investing
| Subjects
| Books
Consumer Behavior
| Marketing & Sales
| Business & Investing
| Subjects
| Books
Research
| Marketing
| Marketing & Sales
| Business & Investing
| Subjects
| Books
ASIN: 0789033402 |
Book Description
One of the most important new concepts in marketing is customer equity—here's the essential information you need to create and manage it!
This book presents thought-provoking, cutting-edge writing on customer equity management. The editors and contributing authors are top international marketing researchers who share their expertise in this new area of marketing research and practice. Capturing Customer Equity: Moving from Products to Markets is designed to enable academics to chart out future research directions and to help marketers to apply recently developed frameworks to the creation and management of customer equity in domestic and international markets. Handy charts, tables, and figures make complex information easy to access and understand.
Capturing Customer Equity: Moving from Products to Markets is divided into five chapters:
Developing Relationship Equity in International Markets This chapter delves into the realm of relationship marketing to define the term relationship equity and presents strategies for enhancing relationship equity in international markets via personal relationships as well as consistent processes and outcomes. This chapter, written by the editors and their partner Arun Sharma, also looks at specific implications for relationship marketing theory and practice in international markets.
Dimension and Implementation Drivers of Customer Equity Management (CEM)—Conceptual Framework, Qualitative Evidence, and Preliminary Results of a Quantitative Study This chapter explores theoretical considerations as well as qualitative and quantitative research applying confirmatory factor analysis. It identifies three important dimensions of Customer Equity Management (CEM)—analytical, strategic, and operational—as well as three types of CEM implementation drivers, which represent determinants of the three CEM dimensions. Authors Manfred Bruhn, Dominik Georgi, and Karsten Hadwich present the measures they've developed for the CEM dimensions and drivers. These measures provide valuable help to practitioners and academics who need to understand how to manage and implement systematic customer equity management.
A Network-Based Approach to Customer Equity Management This chapter, by René Algesheimer and Florian von Wangenheim, moves beyond the dyadic relationship marketing concept to present a theoretical framework for extending current thinking on customer equity towards the network perspective. Based on the current literature in social work, this chapter examines the characteristics that are likely to be powerful predictors of a customer's network value. Practical implications are highlighted, and directions for further research are suggested.
Strategies for Maximizing Customer Equity of Low Lifetime Value Customers The management of customer equity has become a major issue for many firms. This chapter examines strategies designed to assist firms in their relationships with customers who have low lifetime value. By examining the relevant literature as well as industry strategies, author Arun Sharma explores the reasons why "transactional" and "discount" customers have largely been ignored by marketing strategists, and proposes methods to enhance segment penetration and the performance of firms. Implications for managers are also highlighted.
Customer Value-Based Entry Decision in International Markets: The Cnocept of International Added Customer Equity Market entry decisions are some of a firm's most important long-term strategic choices. Still, the international marketing literature has not yet fully incorporated the idea of relationship marketing in general, and the customer value concept in particular, as a basis for market entry decisions. This chapter, by Heiner Evanschitzky and Florian von Wangenheim, presents concepts for a customer value-based market selection model. The metric International Added Customer Equity (IACE), a straightforward decision criterion derived from the customer equity concept, is presented as an additional criterion for export market selection and ultimately, market entry.
Book Description
This digital document is an article from Bulletin (Northwest Public Power Association), published by Thomson Gale on October 1, 2006. The length of the article is 883 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
Citation Details
Title: COSAs provide basis for equity between customer classes.(Power Supply & Risk Management)(Interview)
Author: Kathi VanderZanden
Publication:
Bulletin (Northwest Public Power Association) (Magazine/Journal)
Date: October 1, 2006
Publisher: Thomson Gale
Volume: 60
Issue: 10
Page: 13(2)
Article Type: Interview
Distributed by Thomson Gale
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Customer Equity: Measurement, Management and Research Opportunities (Foundations and Trends in Marketing)
Julian Villanueva , and
Dominique, M. Hanssens
Manufacturer: Now Publishers Inc
ProductGroup: Book
Binding: Paperback
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Customer Equity can help management: · allocate marketing spending for long-term profitability, · understand the connection between budgets, metrics and financial performance, · provide a customer focused approach for measuring firm value, · improve the productivity of CRM platforms by providing frameworks, tools and metrics Customer Equity reviews current models, offers a typology, and examines the fundamental question of whether a customer equity orientation can put a firm in a competitive advantage to other firms. The authors review models that can increase customer equity by optimizing each of its drivers - customer acquisition, customer retention, and add-on selling. Customer Equity is important reading for marketing managers, marketing researchers, scholars and students.
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This digital document is an article from Cornell Hotel & Restaurant Administration Quarterly, published by Cornell University on May 1, 2004. The length of the article is 7989 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
Citation Details
Title: Measuring customer-based restaurant brand equity: investigating the relationship between brand equity and firms' performance.(Restaurant Management)
Author: Woo Gon Kim
Publication:
Cornell Hotel & Restaurant Administration Quarterly (Refereed)
Date: May 1, 2004
Publisher: Cornell University
Volume: 45
Issue: 2
Page: 115(18)
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