Peter Fader will discuss new ways of valuing corporations from the “bottom up”—i.e., determining the forward-looking financial value of the customer base—as a complementary perspective to the standard “top down” methodologies that dominate current practice. This notion, sometimes called “customer equity”, is gaining increasing interest among a variety of functional areas in the corporation (e.g., venture divisions, accounting and finance, as well as marketing), and is often associated with the kinds of “customer-centric” strategic perspectives that arise from his book Customer Centricity: Focus on the Right Customers for Strategic Advantage. This session will introduce this new concept, show how it fits within traditional valuation approaches, contrast it with the popular (but very different) notion of “brand equity”, and offer some current examples of customer-based corporate valuation applied to several companies.

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