Journal of Systems Science and Systems Engineering

, Volume 13, Issue 4, pp 405–422

Customer equity: Making marketing strategy financially accountable


  • Ashwin Aravindakshan
    • Department of Marketing, R.H. Smith School of BusinessUniversity of Maryland
  • Roland T. Rust
    • Department of Marketing, R.H. Smith School of BusinessUniversity of Maryland
  • Katherine N. Lemon
    • Marketing DepartmentCarroll School of Management
  • Valerie A. Zeithaml
    • Kenan-Flagler Business SchoolUniversity of North Carolina

DOI: 10.1007/s11518-006-0173-z

Cite this article as:
Aravindakshan, A., Rust, R.T., Lemon, K.N. et al. J. Syst. Sci. Syst. Eng. (2004) 13: 405. doi:10.1007/s11518-006-0173-z


The article presents an overview of the literature on customer equity and how customer equity provides an opportunity for marketers to make marketing strategy financially accountable. Traditionally, Return on Investment (ROI) models have been used to evaluate the financial expenditures required by the strategies as well as the financial returns gained by them. However in addition to requiring lengthy longitudinal data, these models also have the disadvantage of not evaluating the effect of the strategies on a firm’s customer equity. The dominance of customer-centered thinking over product-centered thinking calls for a shift from product-based strategies to customer-based strategies. Hence, it is important to evaluate a firm’s marketing strategies in terms of the drivers of its customer equity. The article summarizes a unified strategic framework that enables competing marketing strategy options to be traded off on the basis of projected financial return, which is operationalized as the change in a firm’s customer equity relative to the incremental expenditure necessary to produce the change.


Customer equityreturn on marketingbrand equitycustomer valuerelationship marketingmarketing strategycustomer lifetime valuecustomer satisfaction measurement
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© JSSSE 2004