Abstract:

This paper aims to support the proposition that the key to understanding a brand's equity or value lies in examining its ability to retain profitable committed customers while attracting similarly profitable non-customers. This proposition is supported by case histories including work which has been done to link the measured value of customers (spend) with their measured probability of retention (via longitudinal calibration of research data) to extrapolate a TRUE measure of lifetime value. In so doing the paper examines some of the many debates on brand equity (Ehrenberg Feld wick et al) and offers a view on how research can be used to summarise the relative strength (or equity) of different brands and the implications for potential market growth or decline.