Drivers of Customer Equity

Simon, Sumoj
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This research report aims to define the drivers of Customer Equity in the South African Consulting industry. The Driver Model of Customer Equity was used to formulate this research. This report uses a supply-side qualitative survey, and a demand-side quantitative survey to test if the propositions put forward from the literature review and the qualitative survey held true. The identification of the drivers was done through the literature review, and the qualitative survey that was conducted among the suppliers of management consulting services. Five supply-side managers and senior practitioners within consulting firms were used in the qualitative round; the research instrument was a semi-structured interview. The quantitative survey was designed to elicit demand-side responses about what customers considered as important in choosing a consulting firm. The quantitative survey had 36 respondents. The responses to the quantitative questionnaire were tested using a distribution fitting approach and exploratory factor analysis. The distribution fitting approach found the following attributes within the drivers of customer equity to be significantly important: Value Equity - the quality of services rendered; Brand Equity – the customer’s perception of brand ethics, based on the sub-drivers of ethical behaviour and the high regard received from the community/ society; Industry Specific Drivers – the ability to deliver based on a proven track record of successful delivery, as well as the knowledge and intellectual capability of the firm, based on the drivers of intellectual ability and having the right calibre of people to get the job done. The exploratory factor analysis helped to show the interdependent relationships among the variables in the quantitative questionnaire and the underlying constructs that existed in the responses. The factor analysis resulted in a 5- factor solution. The factors obtained were described as: Familiarity, Value, Low-risk, Brand and Retention or Prior experience based purchase decisions
Customer equity, Consultants