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I was out of the office last week attending the funeral of my grandmother.  In her mid-eighties, this woman had survived the Great Depression, raised 5 children and lived long enough to dote on and enjoy 13 great-grandchildren.  Over the years, she hosted countless parties and holiday gatherings for huge numbers of people.  Her door was always open, and there was never a better hostess.  However, what many of us remember most about my grandmother are Sunday dinners, where it was “just us.”

Even during these simple Sunday meals, Grandma insisted on setting the table with the “good” dishes.  When her kids or grandkids would ask why or complain about having to do the prep and clean-up that went with that task, she always had the same answer: “We do this because your family is the most important company you will ever have.” Read the rest of this entry »

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You bet they do. Customer equity is the sum of the lifetime value of all its customers discounted over time. What drives customer equity? Three things drive customer equity: value equity, brand equity and retention equity. Let’s look at each one of these separately and see how they come together to form customer equity.

Value equity is the customer’s objective assessment of the utility or value of the brand based on the product/service cost versus what they receive. This is not based on price but overall value to the customer.

Brand equity is the customer’s subjective and intangible assessment above and beyond its objectively-perceived value. This is not solely about product features and benefits but also about other more intrinsic reasons.

Retention equity is the tendency of the customer to stick with your brand, again, above and beyond the objective and subjective assessments of your brand. Remember, this driver alone will not last forever, so you must build up both the value and brand equity drivers.

The bottom line of all this is that you had better concentrate on owning the customer. Learn which of the drivers your customers desire and create as many touch points as possible to continue to build these drivers. Create a content-filled web site, a communications plan that includes PR, blogs and social media so the customer sees and hears a consistent value proposition and promise. Conduct a Net Promoter Score survey every year. The first year establishes the benchmark.  In the following years you can see how you score against the same categories.

Remember that your customer does have equity in your brand.

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