Reconciling the Customer Equity and the Brand Equity Perspectives on the Financial Value of Marketing – MSI

Working Paper

Reconciling the Customer Equity and the Brand Equity Perspectives on the Financial Value of Marketing

Bobby J. Calder

Northwestern University

Edward C. Malthouse

Northwestern University

Joe Omatoi

Northwestern University

Jan 11, 2023

Compares customer equity and brand equity to determine when each is most appropriately applied and how they might be combined into a more holistic measure of the financial value of marketing.

Topics

research recap

The Value of Marketing: Brand Equity or Customer Equity?

The financial value of marketing can be measured in two distinct ways. Customer Equity is historically tied to data-rich subscription businesses, while Brand Equity may be most relevant for mass market businesses. Combining these perspectives can give a more holistic view of marketing’s contribution, enhancing models of customer lifetime value with “bottom-up” diagnostics.

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