The Customer Equity Model
ORC International’s unique, advanced customer equity model allows organisations to measure the customer experience in the context of the brand promise and the broader external environment. It can be used on both consumer and business-to-business audiences.
Why it matters
Simply being able to define and understand the drivers and extent of your customers’ loyalty is no longer enough in the modern world. The market is saturated with product and service options. To succeed it is essential that businesses deliver a truly unique and differentiated customer experience.
What is it?
The Customer Equity Model helps organisations to really drill down into the finer details that impact on customer’s views and mindsets. The model is unique in its ability to clarify the influences on buying decisions that impact business results and drive strategy development.
How it works
The model captures the customer experience through the measurement of four key factors:
- External influences: traditional marketing, third party opinions as well as personal and external circumstances
- Customer’s mindset: goodwill which is earned over time and generates tolerance and forgiveness
- Customer events: the basics of products and services as well as how they are provided to customers
- Customer loyalty: the degree to which dependence on the brand has been created and the return on the investment in loyalty is determined
Benefits
The global customer research team has combined its decades of project experience to create a model that actually works to prove the connection between satisfied customers and bottom-line profits. Using the Customer Equity Model, clients can:
- Identify external influences that can sway your customers to one brand over another
- Quantify your customers’ good will toward your brands and their dependence on your brands
- Help distinguish what you deliver from how you deliver it
- Better understand varying needs of customer segments, taking the above factors into consideration
- Move beyond customer loyalty to quantify customer equity and the worth of a customer
Figure 1: ORC International’s Customer Equity model
