Question

An increasing number of companies are considering their relationships with customers as financial assets. Such firms measure success by calculating the value of their ________.

Answer 1

Answer: Customer Equity

Explanation: customer equity in simple terms measures customer loyalty. Increasing customer loyalty translates to increasing potential future revenue that can be generated throughout the lifetime of a business. As a result, businesses often improve consumer service, value or desirability of their brands in order to improve customer equity. Therefore, considering the value of customers with companies as financial assets, these companies often measure success in this regard by measuring customer equity.

Answer 2

Answer:

CUSTOMER EQUITY.

Explanation:

Customer relationship management is an approach to maintain a company's interaction with current and potential customers. It mainly focuses on customer retention and driving sales growth.

Customer equity is a result of customer relationship management. It is the total of discounted lifetime value of all the firm's customers. In other words, the more loyal a customer, the more the customer equity.

The theory of Customer Equity can be defined as the value of the potential future revenue generated by a company’s customers in the entire lifetime of the firm.

Therefore, an increasing number of companies are considering their relationships with customers as financial assets. Such firms measure success by calculating the value of their CUSTOMER EQUITY.