Reading the Signs of Your Customer Value

Companies sometimes make short-term marketing decisions without understanding the longer-term implications for their customer base. A company that does not know the value of its customers risks overspending on acquiring low-value customers or pursuing activities that have little influence on customer behavior; it may concentrate on revenue without taking acquisition and retention costs into account. In this article, the author explains how to design and implement a customer equity dashboard that will serve to pinpoint exactly where the company is gaining and losing value. A good customer equity dashboard will be of service, not only to sales and marketing professionals, but also to senior executives, boards of directors, investors and creditors, as sales and marketing expenditure is linked to overall financial performance.