What Is Customer Equity Management?

　　 Customer asset management (Customer?Asset?Management，CAM)

The research on customer equity management abroad originated from the United States. As a new management concept, the key point of CAM is to incorporate customers into enterprise assets, optimize the allocation of enterprise resources, and improve customer loyalty/satisfaction and customer value with customer assets as the core. In order to achieve this goal, the theorists put forward various suggestions on customer equity management model It mainly includes two types: one is the management framework, which aims to explain the relationship between customer equity and enterprise value, and to link different customer oriented activities with customer equity and enterprise competitiveness. For example, Paul D Berger and Ruth N Bolton put forward four key elements (building database, customer segmentation, customer segmentation, CLV Forecast and resource allocation); The other is the marketing framework, which aims to understand the role of customer behavior and its relationship with customer total assets, and strive to explore the impact of customer oriented activities on customer behavior. Typical representatives include Berger and others who proposed a marketing model based on customer lifetime value; Bell and others analyzed the seven obstacles in the birth and implementation of customer equity management model, and provided a "marketing model based on customer equity". In fact, the research in this field is still in its infancy, and there are still many defects and problems in the existing research.

　 Customer Asset Management (CAM)

catalog

1 Overview of customer asset management 2 Role of customer asset management 3 Main schools and existing problems of customer asset management research 4 Further exploration of customer asset management

　　 Overview of customer asset management

The research on customer equity management abroad originated from the United States. As a new management concept, the key point of CAM is to incorporate customers into enterprise assets, optimize the allocation of enterprise resources, and improve customer loyalty/satisfaction and customer value with customer assets as the core. In order to achieve this goal, the theorists put forward various management models related to customer equity, mainly including two types: one is the management framework, which aims to explain the relationship between customer equity and enterprise value, and link different customer oriented activities with customer equity and enterprise competitiveness, such as Paul D. Berger and Ruth N. Bolton Etc. proposed a customer equity management model based on four elements (building database, customer segmentation, CLV prediction and resource allocation); The other is the marketing framework, which aims to understand the role of customer behavior and its relationship with customer total assets, and strive to explore the impact of customer oriented activities on customer behavior. Typical representatives include Berger and others who proposed a marketing model based on customer lifetime value; Bell and others analyzed the seven obstacles in the birth and implementation of customer equity management model, and provided a "marketing model based on customer equity". In fact, the research in this field is still in its infancy, and there are still many defects and problems in the existing research. {page_break}

　　 The role of customer equity management

The research on customer equity management not only enriches the existing theory of customer relationship management, but also has strong practical significance for enterprises. Specifically, the significance of customer equity management research includes:

(1) Deepen the theory of customer relationship management.

Different from the traditional customer relationship management theory, customer equity management based on customer loyalty considers customer relationship from a dual perspective. On the one hand, the improvement of customer loyalty must be based on providing the value that customers value. On the other hand, enterprises can also obtain more economic benefits and various non economic benefits from customers by improving customer loyalty. It can be seen that the customer equity management theory based on customer loyalty is a step forward compared with the traditional customer relationship management theory.

(2) Enrich the theory of customer equity management.

Based on the literature on customer equity management, it can be found that the research on customer equity is still in its infancy, and there are still great differences between the research focus and the research results. The customer equity management based on customer loyalty has established the framework system of customer asset management in detail with customer loyalty as the entry point, It also explores and analyzes the hot and difficult issues in the current research, so the research on customer equity management based on customer loyalty can effectively enrich the content of customer equity management.

(3) Improve enterprise performance.

Through the research on customer equity management based on customer loyalty, enterprises can obtain more loyal customers, and maintain customers for a long time by improving customer loyalty, so as to obtain more customer monetary value and non monetary value, that is, Customer equity management based on customer loyalty can maximize customer equity with more effective marketing communication and more effective customer lifetime value management means, so that enterprises can obtain higher profits.

(4) It provides a basis for enterprises to make marketing decisions.

Enterprise managers often measure enterprise performance according to the market share of products or services. However, market share is a rearview mirror for measuring enterprise performance. It can only indicate the past performance of an enterprise, but cannot indicate its future performance. It can be seen that market share cannot effectively measure the marketing investment income of enterprises. Enterprises should measure the effect of marketing investment according to the impact of marketing investment on customer equity, because customer equity tends to pay more attention to the future performance of enterprises. Therefore, customer equity management based on customer loyalty not only concerns how marketing investment affects the current performance of enterprises, but also considers the impact of marketing investment on the future performance of enterprises. The marketing resource allocation method it provides can more accurately identify the most appropriate customers and formulate the most appropriate marketing activities, more effectively manage various economic and non economic benefits from customers, thus providing decision-making basis for enterprises to formulate marketing programs.

(5) Increase the competitive advantage of enterprises.

The enterprise's loyal customer resources formed through customer equity management, the ability and accumulated knowledge of enterprises to attract new customers, maintain and upgrade old customers, and comprehensively manage customer relations have become the important core factors of enterprises' sustainable development. Such valuable resources, capabilities and knowledge can effectively counter the influence of the five external forces of enterprises, thus making customer equity management an important source of competitive advantage for enterprises. {page_break}

　　 Main points of customer equity management research schools And existing problem

At present, the research on customer equity is still very messy, and the focus and purpose of the research are still very different. The research on customer equity management theory by foreign scholars mainly includes the following three categories:

(1) The financial measurement school of customer assets.

Representatives of this school include Guilding and McManus (2002), Berger, Bolton (2002), Liu Yingzi and Yao Lan (2003), etc. The researchers of this school believe that customer equity will bring more economic benefits to enterprises than peer enterprises. However, compared with tangible assets, this economic benefit has certain uncertainty Therefore, this kind of assets can be classified as intangible assets. Such researchers try to measure customer assets by measuring and accounting methods. At present, such researchers have only made conceptual understanding and some theoretical models for customer equity management, but there is no practical and operable model. It has not been realized to actually record customer assets into accounting entries for asset balance calculation.

However, we can see that measuring customer income and cost with financial measurement method is a kind of "past" oriented customer profitability analysis. However, in an effective market, information flows easily, and customers who are satisfied with the enterprise's products and services will not only repeat their own purchases, but also become an intermediary for free publicity of the enterprise, thus influencing others' purchase decisions, After other customers are satisfied, they will influence other customers to take action. Under the expectation of this virtuous circle, the number of customers of the enterprise increases in geometric progression, and vice versa. Therefore Customer profitability analysis should face the future Considering the expected influence of customers, we cannot rely on short-term profitability analysis to make decisions It is necessary to consider long-term and future interests. Therefore, it can be seen that the financial measurement schools of customer equity only consider the economic profitability of customers from the past perspective, and they do not analyze the value source of customer equity in detail, completely and systematically.

(2) The resource and capability school of customer equity.

This school aims to understand the relationship between customer equity and enterprise value, and link different customer oriented activities with customer equity and enterprise competitiveness. Its representatives include Rust and Zeithaml (2000), Leyland and Ewing (2000), Hogan and Lemon (2002), Chen Zhenxue (2003), Wang Tao and Xu Lan (2002). The greatest contribution of this school is to link customer asset management with enterprise competitiveness, and measure enterprise performance by the effect of customer asset management, It has been relatively slow to learn from and apply enterprise resource theory, capability and knowledge theory to solve customer equity management problems, but this school has laid a certain foundation for the research of customer equity management based on resources and capabilities.

(3) The marketing architecture of customer equity.

This school aims to explore the effect of marketing on customer behavior and its relationship with customer equity, and to explore the impact of customer oriented activities on customer behavior. From the marketing field of its research, it can be divided into three aspects: the first aspect is to study the optimal investment, resource allocation, marketing budget, performance measurement of customer asset acquisition and retention, or to study the methods and strategies of customer asset acquisition and retention; The second aspect is to study the antecedents of customer equity management, including customer lifetime value, customer life cycle, the driving factors of customer equity, the formation mechanism of customer equity, the composition and measurement of customer equity, and the quality analysis of customer equity; The third aspect is to study the relationship between marketing activity tools and customer equity and customer profitability based on the identification of antecedents of customer equity management. Representative figures of customer equity marketing architecture schools mainly include Reinartzetal (2003), Behram, Paul (1997), Behram Hansotia (2004), Paul D. Berger, Nada (2001), Blattberg, Robert (1996), Berger and Bechwati (2001), Blattberg and Robert (2001, 2002), Xu Lan (2004), etc. The research of this school has the following shortcomings:

① Most researchers in this category tend to regard customer retention and customer attraction as the only important customer behavior and value source, while ignoring the contribution of other customer asset management behaviors (such as upgrading, divestiture and churn management) to customer asset value and enterprise performance.

② Although factors such as customer satisfaction have attracted the attention of some scholars, they have neglected customer loyalty, an important antecedent element of customer behavior. Therefore, it is urgent to systematically explore the antecedents of customer behavior and deeply analyze the behavior drivers of customer equity value.

③ At present, many studies have neglected the impact of non purchase behaviors of customers, such as customer recommendation value, customer information value, and customer knowledge value, on customer equity. In addition, theoretical and empirical studies on the drivers of customer purchase behavior and the differential impact of marketing activities on different levels of customer equity are also very limited. {page_break}

　 Further exploration of customer equity management

The research on customer equity management is worth further exploring.

1. Customer asset value is not only reflected in the financial aspect of monetary value, but also in the non-financial aspect

Satisfied customers produce satisfied employees, thus directly serving the improvement of employee morale, production efficiency and service quality. Satisfied customers show their trust, recognition, dependence and intimacy to the enterprise and its employees in psychology. These are undoubtedly the most valuable intangible assets of enterprises. The current literature research only focuses on the value measurement of customer equity, while the research on how to measure the non-financial customer equity value is still lacking.

2. Enterprises only pay attention to the measurement of the financial value of customer assets, which may lead to narrow management of customer assets

Enterprises may focus on the recording and tracking of information about customers' purchase behavior, but pay less attention to the elements that affect customers' attitudes and emotions, such as inaccurate bill issuance and poor product/service delivery. In fact, there is an inseparable relationship between attitude, emotion and behavior. Positive and positive attitudes and emotions contribute to stable and lasting purchase behavior; However, negative and negative attitudes and emotions can easily lead to the loss of customers and the termination of purchase behavior. Therefore, it can be said that it is a way to abandon the attitude and emotion of customers and study the information of customers' purchase behavior in isolation.

3. In terms of the completeness of the existing customer equity value measurement model, there is still room for development

As mentioned above, customers at different stages of the life cycle have different behaviors. The existing measurement model may be closer to reality if an adjustment variable can be added to reflect the different stages of the customer's life cycle.

4. The existing customer equity value measurement model is not very operable

On the one hand, enterprises need powerful database systems to record, track and analyze customers' purchase behavior information and income status. Even though many enterprises have such database systems at present, the scope and complexity of information collection, processing and processing are daunting. A problem that cannot be ignored is that many enterprises are still lack of composite statistical analysis talents who are competent for this work; On the other hand, it is still difficult to accurately measure and allocate the individual cost of each customer; Moreover, many variables in the model are subjective empirical estimates based on information about customers' past purchase behavior, and the accuracy of the estimates largely depends on the evaluation level of the evaluator. It is difficult to say whether the estimated value can be close to the future reality.