Customer Equity Management: The Next Frontier in Banking

Measuring and managing customer equity is the best way to increase a retail bank’s long-term customer value.

Many banks follow one of the two mainstream growth strategies: harvesting their existing customer base or pursuing competitors' customers. Large banks usually opt for the former strategy, while smaller banks often choose the latter. In either case, banks are fishing for the same fish in the same pond. Banks of every size bombard customers and prospects with marketing communications and aggressive cross-sell efforts—steadily deteriorating customer experience. Yet all indicators on a CEO's dashboard may be positive, so a bank's eroding customer equity is overlooked. The result is frustrated customers.