Customer equity takes the perspective of the customer, not the selling firm. It represents the total value of a customer to a company over their lifetime relationship. It is important for marketing managers to understand customer equity in order to create and implement effective marketing strategies that increase customer value and ultimately drive business growth.

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Customer Equity

Question 236

Multiple Choice

Customer equity

A) is of concern to top management, but not very relevant in planning a particular marketing strategy.
B) takes the perspective of the selling firm.
C) always increases over time, at least as long as a firm can stay in business.
D) is important to marketing managers but of little interest to customers.
E) increases as long as the number of customers that a firm serves increases over time.

Correct Answer: