Splendid Unlimited

The more customer loyalty a brand has, the higher its customer equity is, and the more profit the company generates. Therefore, customer equity is a key driver of a business’ success. However, to build strong equity, an organisation needs to have the right products, services and user experience design to drive results. Here’s our breakdown of customer equity and its overall importance in a marketing and business context.  

The customer equity model 

The concept of customer equity helps organisations consider and evaluate their customers as major sources of revenue. When it comes to business growth, customer equity is an important metric for making calculated financial and strategic decisions. There are a few core components that make up the customer equity model, all of which inform a company’s value.  

• Value equity: a core pillar of the customer equity model. It refers to how the customer assesses what your business has to offer. This could include the organisation’s products and services, price, and convenience, as well as overall affordability. 

• Brand equity: represents the image and associated customer perceptions.Brand equity is all about creating a strong and positive image to build trust with customers, a topic which SaaS platform Acquia has discussed at length. Establishing trust gives a company greater value because the product or service are based on a positive reputation from customers.

• Relationship equity: the value that comes from an established relationship. This can be through customer loyalty programmes, networking, referrals and subscriptions, or any other method where there’s an active investment in relationships. 

Customer equity should be at the centre of a business’ operations. To ensure your customers remain loyal, an organisation needs to understand all facets of customer relationships, gaining a greater insight into their problems, buying decisions and interactions.  

What’s the value of customer equity? 

Customer equity remains an important metric for measuring current and potential performance. Its value lies in the way it can give marketers insights and help them form more impactful strategies, as well as understand the business’ customers and estimate the return on investment.  

Customer equity focuses on the strength of a customer’s relationship with your brand and in today’s competitive market, business success is largely dependent on how they manage their assets, including the perceptions and loyalty of their customers. The loyalty and engagement of customers have a massive impact on a business, so reviewing and analysing your company’s products and services regularly is essential.  

Ultimately, the value of customer equity lies in its ability to serve as an indicator of brand awareness and profitable customer relationships.  

Customer equity and CX 

To generate more customers and strengthen relationships, companies need to make their digital customer experience a priority. This means understanding the people you’re trying to serve and creating excellent, personalised journeys that build trust and authority. The overall customer experience, from the tone of voice to the customer journey, is intrinsically linked to brand equity – and the positive interactions between the brand and the customer.

At Splendid UNLIMITED, we believe in creating quality, bespoke customer experiences. We call this ‘Digital made human’. It’s a concept all about building strategies around the needs of human beings, otherwise known as ‘Human Understanding’. Quite simply, a business cannot exist without its customers, so the digital experience plays a crucial role in engaging new customers and retaining existing ones. As a result, acquiring more customers increases equity, paving the way for success. 

What's the next step? 

Customer relationships remain an important part of any business’ success. Having strong connections makes an organisation more valuable, which is why engaging digital experiences are essential.  

Here at Splendid UNLIMITED, we partner with Acquia, a digital experience platform, to help businesses build Drupal experiences to engage customers and drive more conversions. Acquia is an open-source platform that’s designed to simplify digital expansion and help ambitious brands grow. Do you want to find out more? Then get in touch with our team for more information on how Splendid can realise your business goals through digital strategy, design, and development.