Customer Centricity: Focus on the Right Customers for Strategic Advantage (Wharton Executive Essentials)

by Peter Fader

Contractual firms (e.g., those that utilize subscription models, such as Comcast, a health club, or a performing arts organization) are more likely to find value in customer equity; noncontractual firms will tend toward brand equity. Companies that sell highly customized offerings (e.g., investment advisors and grocery stores, in which every customer’s portfolio or cart full of items looks very different) are more likely to find value in customer equity; companies that sell noncustomizable, commoditized offerings (e.g., ice-cream stores and laser eye surgeons) should focus more on brand equity. Companies that sell highly visible products-think sneakers or high-end clothing-are more likely to find value in brand equity. Companies that have powerful intermediaries standing between them and their end users (e.g., a consumer packaged-good manufacturer, a publisher, or a pharmaceutical firm) are more likely to find value in brand equity. Companies that inherently establish long-term relationships with their customers (e.g., insurance companies and educational institutions) are more likely to find value in customer equity. Companies that sell services are more generally likely to find value in customer equity than product-oriented firms.