Explain the difference between share of customer andcustomer equity. Why are these concepts important tomarketers?

Share of Customer and Customer Equity are two important concepts in marketing that help businesses understand their relationship with their customers and the value those customers bring to the business.

1. Share of Customer: This refers to the percentage of a customer's purchasing that a company has. For example, if a customer spends $100 a month on coffee and$50 of that is spent at Starbucks, then Starbucks has a 50% share of that customer's coffee purchases. This concept is important because it helps businesses understand how much of their customers' spending they are capturing. The goal is to increase the share of customer, which can be done by increasing the frequency of purchases, increasing the quantity of purchases, or by cross-selling and up-selling.

2. Customer Equity: This is the total combined customer lifetime values of all of the company’s customers. In simpler terms, it's the total potential revenue a business can earn from its customers over the lifetime of their relationship. This concept is important because it helps businesses understand the long-term value of their customers and how much they should be willing to spend to acquire new customers.

Both of these concepts are important to marketers because they help guide strategies for customer retention, acquisition, and growth. Understanding these metrics allows marketers to allocate resources more effectively and make strategic decisions that will ultimately drive more revenue for the business.