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Rating: 
Summary: Strong framework for shaping marketing strategy!
Review: By presenting a simple yet powerful organizing framework linking marketing tactics to customer equity, this book helps marketing professionals understand HOW to execute a customer focused marketing strategy. It is practical and highly useful from start to finish. In addition, it is approachable yet deep enough to appeal to those looking for a strong start into this subject area.The text is concise, with a balanced use of graphics and case examples. Each chapter concludes with a "Key Insights" and "Action Steps" summary. Time-pressed readers will find the style suitable for quick reading. Dan Michaluk is a simulation designer for ExperiencePoint, creators of award-winning business simulations.
Rating:
Summary: Customer Equity: Moves the reader fom consepts to numbers
Review: I approached this book as a heavy consumer of marketing literature in general and customer lifetime value literature specifically. Based on previous readings my expectations were low. However, the book's basic messages pertaining to customers not products, services not products, identifying the three drivers of customer equity and finally, how to estimate the numbers fascinated me. Through Customer Equity the reader can learn about some of the fundamentals behind what drives a company's profitability. CEOs are not concerned about the 4P's of marketing. Their focus is on the overall recourses allocation in order to secure future revenue from current and future customers. This book recognizes this and provides the reader with a roadmap to the allocation of the marketing budget among three main drivers of customer equity, i.e. brand equity, value equity or retention equity. Customer Equity provides the reader with sophisticated tools to estimate the financial consequences of the alternatives before they are executed. The ability to estimate the impact of improvement in any of the three areas on customer equity, will in my mind regain marketers access to the CEO -an access they lost to finance and strategy in the 1980s. In an era influenced by customer relationship management thinking, Customer Equity is a must reader for enlightened managers.
Rating:
Summary: A Useful Tool for Marketing and Communications Managers
Review: Many marketing executives are challenged to evaluate the impact of their marketing communications and customer relationship strategies, but too often get bogged down in short-term measures like click-throughs and direct response. Driving Customer Equity is a valuable tool for quantifying the long-term impact of investments in building a brand and improving customer satisfaction. It is based on a logical framework that recognizes the financial returns from building brand equity, improving perceived value and increasing customer satisfaction. The book does more than provide a useful framework and report real research. It also includes hands-on tools that can be used by managers, consultants and researchers. I am recommending this book to all of my clients in the hope that it encourages a long-range focus that recognizes building customer equity is more important than short-term sales.
Rating: 
Summary: Useful guidebook for emerging businesses
Review: Since the beginning of the industrial revolution, companies have built an organization around their products. In the traditional corporate model, finance, marketing, information systems, and operations focus on the profitability of products rather than customers. In recent years, companies have attempted to become more customer focused but often lack the organizational structure and corporate strategy to succeed in this transformation. In Driving Customer Equity, Roland Rust, Valarie Zeithaml, and Katherine Lemon develop a conceptual framework to help companies reshape their corporate strategy to grow the lifetime value of their customer base, or "customer equity". Although the concepts and strategies in this book could, theoretically, grow customer equity, the lack of real world implementations offered in this book leave the reader unsure of the feasibility to existing firms. Rust, et al., break down the customer equity strategy into four parts: examining the problems with traditional product-oriented strategies, defining the customer equity framework, developing a customer-centered strategy, and managing the customer equity strategy. Each concept within the customer equity strategy is clearly organized and explained. At the end of each chapter the authors provide a table of "key insights" matched to "action steps" for each insight. Throughout the book, these tables provide a high-level roadmap to implementing the customer equity framework. Beginning with two important concepts, the "profitable product death spiral" and the "lifetime value of the customer", the authors build a good case for changing a company's focus from products to customers. The theory's foundation is that companies who remove unprofitable products from the marketplace may lose customers who purchase bundled products and therefore lose long-term profit potential. Rust, et al., argue that companies who focus on the value of the customer over their lifetime may choose to keep unprofitable products to maintain or grow their customer base and increase long-term customer equity. The authors build on this basis by breaking down customer equity into three unique but interdependent areas - value equity, brand equity, and retention equity. Value equity of a company is "when what it offers matches what the customer expects and perceives value to be." The concept of value equity is used as the foundation of the customer's relationship with the firm. Brand equity is defined as the "customer's subjective and intangible assessment of the brand, above and beyond its objectively perceived value." Retention equity is defined as the "customer's tendency to stick with the brand, above and beyond objective and subjective assessments of the brand." While none of these three concepts are new, Rust, et al., redefine these areas in terms of the impact, needs, and perceptions of the individual customer. The action steps at the end of these chapters, such as "Engage in marketing research to understand which definitions of value are relevant to your customers. Tailor offers to focus on different value perception," are mostly common sense. There are no novel gems of wisdom, but instead a woven fabric of simultaneous actions necessary for the customer equity strategy to work. In subsequent chapters, the authors go on to develop a customer-centered strategy that tries to measure customer equity, evaluate the financial impact of different customer equity strategic decisions, and convince upper management that customer-centered strategy will be more profitable to the company. Each section is well written and again provides action steps. However, these steps, such as "Develop a uniform evaluation procedure for all improvement programs for increasing Customer Equity," are often very high-level or require very large investments in time or money. The last few chapters investigate ways to manage customer equity through redefining market segmentation based on the profitability of each customer rather than demographic, geographic, or psychographic approaches. As a result of this new segmentation, the authors show that some customers who are actually a drain on the company's resources should be proactively removed from the customer pool, thus lowering costs. It may seem counter-intuitive to decrease customers, but the authors make a good argument and provide ways to remove the customers gracefully. While the book is well written and clearly explained, there are a few problems with the implementation logistics for existing firms. Examples of successful shifts to customer equity strategy are scare and repetitious. Fed Ex, IBM, and banks are some of few real-world companies that are shown to have implemented parts of the customer equity framework. There is no example of a company who has adopted the entire customer equity strategy. Without at least one leader in this revolution, managers may hesitate to pick up the banner of customer equity. Another complicating issue is the customer equity strategy must be implemented at all levels of the company simultaneously to be effective. Many of the action steps require a significant amount of time, money, and buy-in from upper management, as well as fundamental shifts in organization and company values. For a start-up company, this strategy could be incrementally implemented as the company grows, but for established organizations it is a daunting and most likely impossible task. Rust, Zeithaml, and Lemon have described a very thorough strategy that will most likely become the standard of operation for new companies. The ideas expressed in Driving Customer Equity, taken as a whole, could grow value equity, brand equity, and retention equity. However, without a success story to rally interest, successful implementation for existing firms is out of reach unless the fundamental values of and dedication to the customer equity strategy are embraced by senior management, employees, and shareholders.
Rating:
Summary: Useful guidebook for emerging businesses
Review: Since the beginning of the industrial revolution, companies have built an organization around their products. In the traditional corporate model, finance, marketing, information systems, and operations focus on the profitability of products rather than customers. In recent years, companies have attempted to become more customer focused but often lack the organizational structure and corporate strategy to succeed in this transformation. In Driving Customer Equity, Roland Rust, Valarie Zeithaml, and Katherine Lemon develop a conceptual framework to help companies reshape their corporate strategy to grow the lifetime value of their customer base, or "customer equity". Although the concepts and strategies in this book could, theoretically, grow customer equity, the lack of real world implementations offered in this book leave the reader unsure of the feasibility to existing firms. Rust, et al., break down the customer equity strategy into four parts: examining the problems with traditional product-oriented strategies, defining the customer equity framework, developing a customer-centered strategy, and managing the customer equity strategy. Each concept within the customer equity strategy is clearly organized and explained. At the end of each chapter the authors provide a table of "key insights" matched to "action steps" for each insight. Throughout the book, these tables provide a high-level roadmap to implementing the customer equity framework. Beginning with two important concepts, the "profitable product death spiral" and the "lifetime value of the customer", the authors build a good case for changing a company's focus from products to customers. The theory's foundation is that companies who remove unprofitable products from the marketplace may lose customers who purchase bundled products and therefore lose long-term profit potential. Rust, et al., argue that companies who focus on the value of the customer over their lifetime may choose to keep unprofitable products to maintain or grow their customer base and increase long-term customer equity. The authors build on this basis by breaking down customer equity into three unique but interdependent areas - value equity, brand equity, and retention equity. Value equity of a company is "when what it offers matches what the customer expects and perceives value to be." The concept of value equity is used as the foundation of the customer's relationship with the firm. Brand equity is defined as the "customer's subjective and intangible assessment of the brand, above and beyond its objectively perceived value." Retention equity is defined as the "customer's tendency to stick with the brand, above and beyond objective and subjective assessments of the brand." While none of these three concepts are new, Rust, et al., redefine these areas in terms of the impact, needs, and perceptions of the individual customer. The action steps at the end of these chapters, such as "Engage in marketing research to understand which definitions of value are relevant to your customers. Tailor offers to focus on different value perception," are mostly common sense. There are no novel gems of wisdom, but instead a woven fabric of simultaneous actions necessary for the customer equity strategy to work. In subsequent chapters, the authors go on to develop a customer-centered strategy that tries to measure customer equity, evaluate the financial impact of different customer equity strategic decisions, and convince upper management that customer-centered strategy will be more profitable to the company. Each section is well written and again provides action steps. However, these steps, such as "Develop a uniform evaluation procedure for all improvement programs for increasing Customer Equity," are often very high-level or require very large investments in time or money. The last few chapters investigate ways to manage customer equity through redefining market segmentation based on the profitability of each customer rather than demographic, geographic, or psychographic approaches. As a result of this new segmentation, the authors show that some customers who are actually a drain on the company's resources should be proactively removed from the customer pool, thus lowering costs. It may seem counter-intuitive to decrease customers, but the authors make a good argument and provide ways to remove the customers gracefully. While the book is well written and clearly explained, there are a few problems with the implementation logistics for existing firms. Examples of successful shifts to customer equity strategy are scare and repetitious. Fed Ex, IBM, and banks are some of few real-world companies that are shown to have implemented parts of the customer equity framework. There is no example of a company who has adopted the entire customer equity strategy. Without at least one leader in this revolution, managers may hesitate to pick up the banner of customer equity. Another complicating issue is the customer equity strategy must be implemented at all levels of the company simultaneously to be effective. Many of the action steps require a significant amount of time, money, and buy-in from upper management, as well as fundamental shifts in organization and company values. For a start-up company, this strategy could be incrementally implemented as the company grows, but for established organizations it is a daunting and most likely impossible task. Rust, Zeithaml, and Lemon have described a very thorough strategy that will most likely become the standard of operation for new companies. The ideas expressed in Driving Customer Equity, taken as a whole, could grow value equity, brand equity, and retention equity. However, without a success story to rally interest, successful implementation for existing firms is out of reach unless the fundamental values of and dedication to the customer equity strategy are embraced by senior management, employees, and shareholders.
Rating: 
Summary: Waves the flag, but doesn't offer much leadership
Review: The book is fundamentally right on a key principle -- companies need to focus on customers, not products or even markets. They argue that long-term growth is based on creating customer equity, which is based, depending on varying circumstances, on value, brand and retention equity. However, the book is a confusing mishmash that reads like it was written by committee. Points are redundant. There are three identical charts, for example, of the "profitability death spiral." The links between a theory we can all agree on -- customers are important -- and strategy that can impact operations and marketing are weak. And the calculations for tactics -- determining the right mix of value, brand and retention equity -- are incomprehensible, and I've got a background in accounting. They read like they were lifted from an academic article by one of the authors. The stories they tell to illustrate their points -- Priceline, Amazon -- are rehashes of the same story we've all heard so many times before. Bottom line: Good concept, some intriguing thoughts (re: a customer equity officer) but no roadmap on how to get from a good idea to actual results. A worthwhile scan, but not much more.
Rating:
Summary: Waves the flag, but doesn't offer much leadership
Review: The book is fundamentally right on a key principle -- companies need to focus on customers, not products or even markets. They argue that long-term growth is based on creating customer equity, which is based, depending on varying circumstances, on value, brand and retention equity. However, the book is a confusing mishmash that reads like it was written by committee. Points are redundant. There are three identical charts, for example, of the "profitability death spiral." The links between a theory we can all agree on -- customers are important -- and strategy that can impact operations and marketing are weak. And the calculations for tactics -- determining the right mix of value, brand and retention equity -- are incomprehensible, and I've got a background in accounting. They read like they were lifted from an academic article by one of the authors. The stories they tell to illustrate their points -- Priceline, Amazon -- are rehashes of the same story we've all heard so many times before. Bottom line: Good concept, some intriguing thoughts (re: a customer equity officer) but no roadmap on how to get from a good idea to actual results. A worthwhile scan, but not much more.
Rating: 
Summary: The next edition should be much shorter
Review: This book has a few great points, however it continues to assert them page after page after page. The writing reflects a group effort, as you will find yourself reading a definition that was already articulated in the immediately preceding section. Each small passage or section within the chapters reads like it's own 500 word essay, meant to read independent from writing around it. Little clear quanatative methods are expressed, rather we are forced to endure a hodgepodge of graphs that belong in a high school classroom. Like the graphs, this book was poorly written. The sections are confusing and painful to endure. All of the concepts could be presented in a more condensed fashion, and quantative methods addressed. Better works are out there, so save your money on this one.
Rating:
Summary: New ideas for strategy
Review: This book is an eye-opener. In practical, non-technical terms, it shows how corporate strategy (and especially marketing strategy) can be based on customer lifetime value rather than product profitability. It brings strategy in line with the latest thinking in customer relationship management (CRM). The ideas about making all marketing expenditures financially accountable are fascinating, and the book suggests how this can be accomplished through the concept of customer equity. Also, every company is trying to make the internet count, and this book shows how different internet marketing efforts can increase customer lifetime value in different ways. Some people at old-fashioned companies may have difficulty grasping some of these new ideas (which are rooted in the new economy and customer relationship management) but to progressive executives this book will look like the future of strategy.
Rating:
Summary: The next edition should be much shorter
Review: This book shows you the importance of been a client focus organisation through ''value, brand and retention equity''. Also good for strategy.
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