Table of Contents

Handbook of Research on Customer Equity in Marketing

Handbook of Research on Customer Equity in Marketing

Research Handbooks in Business and Management series

Edited by V. Kumar and Denish Shah

Customer equity has emerged as the most important metric to manage firm performance. This Handbook covers a broad range of strategic and tactical issues related to defining, measuring, managing, and implementing the customer equity metric for maximizing firm performance. Drawing upon the wisdom of a global pool of leading scholars, the book serves as a comprehensive and authoritative guide on customer lifetime value and customer equity for marketing researchers, practitioners, and students worldwide.

Chapter 1: Drivers of customer equity

Roland T. Rust, James Kim, Yue Dong, Tom J. Kim and Seoungwoo Lee

Subjects: business and management, marketing


The ‘service revolution’ has shifted the core of exchange between firms and customers from products to the provision of service (Vargo and Lusch, 2004). Long-term one-to-one customer relationships have come to the fore while customer transactions, the hallmark of a product economy, are being increasingly de-emphasized (Peppers and Rogers, 1993). While firms can’t ignore the need for attracting new customers, the retention of existing customers has become more crucial to long-term profitability. Innovations in information technology further accelerate such structural changes in the economy as true interactivity between firms and customers, customer specific personalization, and real-time adjustments to a firm’s offerings are becoming reality (Rust and Lemon, 2001). Such trends that define today’s economy necessitate the fundamental rethinking of business and strategy around the customer.