Chapter 8: Word-of-mouth and marketing effects on customer equity
Restricted access

Companies can acquire and grow customers in many ways, and different strategies will bring very different results to the firm. Many chief marketing officers (CMOs) rely on short-term metrics such as quarterly sales and earnings to assess their return on marketing. Inasfar as good marketing creates and cements customer relationships with the firm, these short-term metrics risk underestimating the true impact of their efforts. Customer equity has emerged as a powerful paradigm to monitor and measure the long-term financial impact of marketing spending and of word-of-mouth, not only in inherently relationship-oriented sectors (such as insurance) but also in transactions-dominated sectors (such as consumer packaged goods). We start this chapter by proposing that managers improve the measurement of their customer acquisition efforts. Some believe that customer equity management should focus on already-acquired customers. This reasoning is flawed, because a firm acquiring the wrong customers will have serious difficulties in trying to retain and grow them later on.

You are not authenticated to view the full text of this chapter or article.

Access options

Get access to the full article by using one of the access options below.

Other access options

Redeem Token

Institutional Login

Log in with Open Athens, Shibboleth, or your institutional credentials

Login via Institutional Access

Personal login

Log in with your Elgar Online account

Login with you Elgar account
Edited by V. Kumar and Denish Shah