Customer Equity: An Integral Part of Financial Reporting

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...

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Bibliographic Details
Published in:Journal of marketing 2008-03, Vol.72 (2), p.1-14
Main Authors: Wiesel, Thorsten, Skiera, Bernd, Villanueva, Julián
Format: Article
Language:English
Subjects:
Brand equity
Cash flow
Customer bases
Customer retention
Customers
Decision making
Equity
Financial management
Financial reporting
Financial statements
Investors
Marketing
Studies
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Summary: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.
ISSN:0022-2429
1547-7185
DOI:10.1509/jmkg.72.2.1