Return on Customer is the first book to focus on how firms create value, not just by driving current profits, but by preserving and increasing customer lifetime value. In a powerful blend of theory and practice, Peppers and Rogers demonstrate how to create shareholder value more efficiently by concentrating on Return on Customer, a revolutionary business metric focused on a company’s scarcest resource – customers.
“To remain competitive, you must figure out how to keep your customers longer, grow them into bigger customers, make them more profitable, and serve them more efficiently. And you want more of them.
Unfortunately, the financial metrics you learned in business school are not easily adapted to account for the value companies generate from this scarce resource, with the right balance between current-period sales and customer lifetime value. But striking that balance is necessary if you want to know whether you’re better off investing in customer acquisition, or in product development, or opening new stores, or plant efficiency, or better qualified personnel, or more service, or cost reduction. While you may believe in your heart that a particular decision creates shareholder value, there’s no financial metric currently available to tell you how much shareholder value you actually created, or even whether you created any at all.
But Return on Customer can help you. Return on Customer is a breakthrough financial metric that can quantify the actual shareholder value you are creating (or, possibly, destroying) with your various business actions and initiatives.”
—from Return on Customer