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A network based approach to customer equity management


Algesheimer, René; von Wangenheim, Florian (2006). A network based approach to customer equity management. Journal of Relationship Marketing:39-57.

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 customer's network value. We make propositions for future research and highlight practical implications.

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 customer's network value. We make propositions for future research and highlight practical implications.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
08 Research Priority Programs > Social Networks
Dewey Decimal Classification:330 Economics
Language:English
Date:2006
Deposited On:29 Mar 2019 12:25
Last Modified:25 Sep 2019 00:32
Publisher:Taylor & Francis
ISSN:1533-2675
OA Status:Closed
Publisher DOI:https://doi.org/10.1300/J366v05n01_04
Related URLs:http://www.tandfonline.com/doi/abs/10.1300/J366v05n01_04 (Publisher)
Other Identification Number:merlin-id:3537

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