Customer equity refers to the value of tangible and intangible resourc
es that customers invest in particular retailers. However, the difficu
lty in identifying or giving weight to customer investments often lead
s retailers to neglect their customers. Through this neglect,retailers
can damage their customer equity and thereby jeopardize their (i.e.,
the retailers')futures. The purpose of this study is to develop the co
ncept of customer equity from a transactions-based approach and to off
er implications for its management by retailers. Specifically, custome
r equity is conceptualized as the value of resources a customer exchan
ges for a retailer's explicit or implicit promise for remuneration. As
such, the customer retains property rights to these resources. Furthe
rmore, customers make a conscious choice to invest their tangible and
intangible resources in a retailer. Accordingly, retailers can improve
their likelihood of long-term success by taking more active roles in
creating and managing customer equity.