Definition of Customer Equity
Customer equity is the result of an organization’s relationship efforts to retain their current customers and generate future revenue from them. Customer equity discounted the future values of all organizational customers. Through this, organizations measure the loyalty of their customers. The more the equity, the more the loyalty. Firms like Google, Apple, or KFC have strong customer equity and it gives them a sustainable competitive advantage.
To get customer equity value, companies measure the amount spent to acquire and retain one customer and revenue generated from the customer over some time.