Customer equity: An integral part of financial reporting

Wiesel T., Skiera B., Villanueva J.


Abstract
Recent initiatives demand information that supplements and complements a firm's financial statements to bridge the gap between financial statement capabilities and financial reporting objectives. Such information assists investors' decision making by explaining the main trends and factors that underlie the development, performance, and position of the firm's business. Firms that aim to increase the value of their customer base should report forward-looking customer metrics because such reports align customer management with corporate goals and investors' perspectives. The authors propose a means to report customer equity that enables investors-the "consumers" of financial reports - to monitor firms' performance with respect to their customer assets. Furthermore, they develop a specific model for Netflix and apply it to quarterly data from September 2001 to September 2006. © 2008, American Marketing Association.

Keywords
Customer equity; Customer lifetime value; Decomposition; Financial reporting



Publication type
Article in Journal

Peer reviewed
Yes

Publication status
Published

Year
2008

Journal
Journal of Marketing

Volume
72

Issue
2

Start page
1

End page
14

Pages range
1-14

Language
English

ISSN
0022-2429

DOI

Full text

Affiliation
IESE Business School; University of Amsterdam