But the way we define customer equity, it includes the value of future customers, in addition to current ones. An easier way to think of this might be to say that by our definition, customer equity should not only include the value of current customers, but the value of prospects as well. Every identified prospect has some probability of becoming a customer, and if the prospect becomes a customer then the customer will have a lifetime value. So, the value of any single prospect is the probability that he will become a customer, multiplied by his lifetime value if he does.
Hear more in Creating Customer Value, a SearchCRM.com monthly podcast series with Peppers and Rogers.
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