The Importance Of Customer Equity And Branding: A Research Note

Abstract

Customer equity is based on the assumption that a customer is a financial asset that needs proper management. The drivers of customer equity are relationship equity, value equity, and brand equity, which focus on the link between the customer and the firm, customer’s objective evaluation of the serviceableness of a brand, and a customer’s opinion about a brand, respectively. Customer equity mainly acts as a marketing system for organizations and companies. Customer equity allows calculation of a customer’s asset value, which helps companies make sound investment decisions and adjustments in marketing investment levels, among other benefits. Branding, on the other hand, focuses on the image of a business. The process of branding comprises market analysis, brand architecture, a big idea, marketing communications, employee involvement, and measurement. Through branding, companies are able to survive and remain competitive in dynamic markets and build a professional image. Strong branding also equalizes the value between small and big firms in the eyes of a customer, builds confidence in business owners and customers, and promotes consistency in business.