A Network Based Approach to Customer Equity Management

Journal of Relationship Marketing, 2005

25 Pages Posted: 22 Jul 2015 Last revised: 20 Apr 2018

See all articles by Florian V. Wangenheim

Florian V. Wangenheim

ETH Zurich; ETH Zürich - Department of Management, Technology, and Economics (D-MTEC)

René Algesheimer

University of Zurich

Date Written: 2005

Abstract

The customer equity concept has attracted substantial interest from academics and practitioners during the last years. While direct drivers of customer equity such as customer transactions, cross- and up-buying behavior have been well understood and researched, indirect effects, and in particular social network effects have been ignored, although it is well known that brand community influence, word of mouth communication and other social effects are powerful influencers of buying behavior and should thus not be ignored in customer management. Thus, we propose that the customer equity perspective should evolve into a customer network equity perspective. In the following, we develop and present a theoretical framework for extending current thinking on customer equity towards the network perspective. In particular, we derive, based on the social network literature, characteristics that are likely to be powerful predictors of a customers’ network value. We make propositions for future research and highlight practical implications.

Keywords: Customer Equity, Customer Network, Customer Lifetime Value, Community, Word of Mouth

Suggested Citation

Wangenheim, Florian V. and Algesheimer, René, A Network Based Approach to Customer Equity Management (2005). Journal of Relationship Marketing, 2005, Available at SSRN: https://ssrn.com/abstract=2633900

Florian V. Wangenheim

ETH Zurich ( email )

Weinbergstrasse 56
Zurich, 8092
Switzerland
41-44-632 6924 (Fax)

HOME PAGE: http://www.techmarketing.ethz.ch/

ETH Zürich - Department of Management, Technology, and Economics (D-MTEC) ( email )

Zurich
Switzerland

René Algesheimer (Contact Author)

University of Zurich ( email )

Department of Business Administration
Andreasstrasse 15
Zurich, 8050
Switzerland

HOME PAGE: http://www.market-research.uzh.ch

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