Study On Customer Equity Drivers From Relationship Perspective

Marketing is changing from product-oriented to service-oriented. Corporations also begin to pay attention to relationship marketing instead of transaction marketing. These changes lead the enterprises to transfer from marketing products to managing customers, and progress in science and technology provides the conditions for in-depth study of customer management. In the field of marketing, studies on customer equity have become a forefront issue, and the studies on customer equity drivers are in-depth studies on customer equity and the problem needs to be solved urgently in corporations. Based on the previous theory and research results, this study focuses on drivers of customer equity, reveals the formation mechanism of customer equity to some extent;. It will provide theoretical guidance for customer relationship management practices in China's enterprises, especially for how to optimimally allocate marketing resources.The main content of this study includes such area. First, it will find drivers of customer equity and understand the basic information on customer equity management in the field of empirical research through studies on the related literature at home and abroad; Second, it will definite the constituent elements of customer equity from the relationship perspective through previous research results; On the basis of theoretical analysis, it will build customer equity drivers model, and analyze the relationships between various drivers and constituent elements of customer equity, as well as the relationships among drivers of customer equity to draw on the research assumptions; Final, it will conduct a empirical research to the driven-model of customer equity through the investigation of the potential customers and the market reality customers by taking daily cosmetics market as the research object, test on the relationships of various drivers and the driven effects to customer equity in empirical research with structural equation model and discuss the formation mechanism and management strategy of customer equity in daily cosmetics industry from two levels of theory and practice. Through the above theoretical and empirical research, it draws the following conclusions:(1)From the relationship perspective, the customer equity includes acquisition customer equity, retention customer equity and extension customer equity.In this paper, it divides customer equity from the relationship perspective based on the understanding of the definition of customer equity and the summary of previous research, following the first customer equity thinking of the Blatterberg and Deighton(1996); and puts forward that the customer equity composes of acquisition customer equity, retention customer equity and extension customer equity. Acquisition customer equity is defined as: the formation of the discounted cash flow value from the first purchase by the current customers and future customers to buy for the first time; retention customer equity is defined as the discounted cash flow value from the current and future customers to purchase an enterprise's products and services for a period; extension customer equity is defined as the customer equity based on the existing customer through the existing customers to upgrade sales, cross-selling and the additional purchase of retention customers. The reason for the above division is to help companies analyze the different operating period and develop the right customer equity-driven strategy according to practical needs of enterprise customers.(2)The formation of customer equity is a result driven by various elements.Based on the theoretical study of the previous literature, through theoretical and empirical combination, it concludes that: customer equity drivers of daily cosmetics market mainly can be divided in two types: the first type is customer equity direct-driven elements, including the three main elements: First, the customer value-driven elements which improve product quality and create value for customers; second, the brand-driven elements to increase the long-term reliability of corporate behavior and create brand image and corporate reputation; third is the customer trust elements to enhance interaction between customers and enterprises and create emotional ownership of customers to the enterprise. The second type is customer equity intermediary elements. These elements which are formed by customer equity direct-driven elements and have driving effects on customer equity include two drivers: One is customer satisfaction elements that make customers be satisfied to the products of the enterprise or the enterprise. The other is the switching barrier elements through the establishment of various behaviors of switching barriers in the economic, psychological and emotional fields. In marketing practice, the enterprises can develop customer equity-driven strategy and put it into actions, establish the long-term relationship between customers and enterprises and achieve the maximization of customer equity according to the two categories drivers of five elements.(3)Acquisition customer equity is influenced mainly by the drivers such as customer value, brand image and the switching barriers.The results of theoretical and empirical analysis show that: customer value and brand image have positive impact on acquisition customer equity; the awareness that potential customers apperceive switching barriers will inhibit customer's initial purchase; the switching barriers have negative impact on acquisition customer equity. For the first time to buy, customers conduct a comprehensive evaluation to products (services) before they can make the right decisions. Especially in the absence of experiencing products (services), the awareness of customer value and the dependence on brand image are particularly important.(4)Retention customer equity is mainly driven by customer value, brand image, customer trust and switching barriers and customer satisfaction.The results showed that: customer value, brand image and customer trust will drive retention customer equity directly and these three elements have a direct effect on it; switching barrier and customer satisfaction also have positive impact on retention customer equity. At the same time, customer value, brand image, customer trust and customer satisfaction will have positive effect on customer satisfaction and customer satisfaction have positive impact on retention customer equity. Brand image and customer trust will have positive effects on switching barrier, and switching barriers will promote customer retention, have positive effects customer retention of equity.(5) Extension customer equity is driven mainly by customer value, brand image, customer trust, switching barrier and customer satisfaction. As the same as the results of the relationship of the drivers of retention customer equity, theoretical and empirical research results show that: customer value, brand image and customer trust will directly drive extension customer equity, so these three factors have direct impacts on extension customer equity. Customer satisfaction and switching barriers also have positive effects on extension customer equity. At the same time, customer value, brand image and customer trust will have positive effects on customer satisfaction, customer satisfaction have positive impact on extension customer equity. Brand image and customer trust will have positive effects on switching barriers; switching barriers will promote the extension of customer purchase and have positive effects on extension customer equity.The innovations of this research are as follows:(1)This study established Customer equity driven-model.This study takes customer value, brand image, customer trust as the exogenous latent variables to customer equity, customer satisfaction and switching barriers as the endogenous latent variables to customer equity, established a customer equity driven model. This paper establishes a driven-model of acquisition customer equity through studying potential customers and a driven-model of retention and extension customer equity through studying existing customers. On this basis, this paper studies the driven mechanism that how these drivers influence the elements of customer equity. Therefore, the driven-model of customer equity that integrates most literature perspective is the further deepening of theoretical research of customer equity.(2) This issue is studied from a new perspective.According to the relationship between customers and enterprises, the paper has divided customer equity into acquisition customer equity, retention customer equity and extension customer equity and made clear definitions for these components. Researchers previously have classified the status of customer relationships, made the relationship between customers and enterprises be divided into customer acquisition, customer retention and customer extension. But so far no scholar has made such division and defined the components clearly.This paper has studied customer equity from a relationship perspective and explored health situation of customer equity through the evaluations about all kinds of customer equity drivers made by customers. Although this method can not accurately predict the amount of customer equity, but can guide the decision-making practice of corporate marketing activities, help enterprises find the shortcomings and bottlenecks in the marketing process, thus be able to identify problems and seek solutions to the problem. This is an innovation in research perspective.(3)This paper has raised a better empirical method to study customer equity and better terms to measure structural variables.This paper extracts the factors of customer equity through the interviews with customers and with enterprises, expands the previous theoretical research results, analyzes structural variables raised in previous research on customer equity, and puts forward some measurement terms. The series of the measurement variables in this study will no doubt lay the foundation for further empirical research of customer equity, or be of a theoretical value. In empirical studies, this paper will build a model of the complicated relationships of the structural variables with structural equation, and verify the relationships with structural equation analysis. It is relatively rare in the current domestic academic research on customer equity of the Empirical studies.