K. Bit - Business and Marketing

 ‘Customer Loyalty’, a very well heard term when it comes to brands or businesses. But what is ‘ Customer Equity ’? Putting it straight to facts, Customer Equity is the main goal of Customer/Brand Loyalty and Customer Relationship Management. Customer Equity is the total combined lifetime value of company’s current and potential customer. Customer Equity can be a performance highlighter of company’s performance better than current sales, as it reflects the future. It is very economical to increase brand loyalty, as loyal customers are almost 5 times cheaper than gaining new customers. Loyal customers spend more. Losing customers can be costly because it results in losing not only current sales, but also losing a lifetime flow of revenues from that customer and many more customers that could’ve been brought by that one customer. This theory is termed as ‘ Customer Lifetime Value ’. Starbucks and Lexus Famous brands such as Starbucks and Lexus measure their customer lifetime values, wi