Customer equity refers to the expected earnings from current and prospective customers over a specific period. It is a measure of the long-term value that a customer brings to a company. It takes into account the customer's lifetime value, potential referrals, and loyalty. Hence, the option E is the best choice.

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Customer Equity

Question 229

Multiple Choice

Customer equity

A) focuses on the costs of acquiring new customers rather than on increasing revenues from current customers.
B) is basically a historical measure of how profitable a firm has been in the past.
C) is a concept that applies to firms that target final consumers but not to firms that target business customers.
D) will increase if a firm increases its market share with a particular strategy.
E) is the expected earnings stream of a firm's current and prospective customers over some time period.

Correct Answer: