Marketing Management, 16th Edition

Customer Lifetime Value and Brand Equity

The customer lifetime value (customer equity) perspective and the brand equity perspective certainly share many common themes. Both emphasize the importance of customer loyalty and the notion that we create value by having as many customers as possible pay as high a price as possible.

In practice, however, the two perspectives emphasize different things. The customer equity perspective focuses on bottom-line financial value. The main benefit of customer equity is that it yields quantifiable measures of financial performance. At the same time, it does not fully account for some of the important advantages of creating a strong brand, such as the ability to attract higher-quality employees, elicit stronger ...