This new customer economy is also spurring a new way of measuring company valuation. We have historically measured businesses on their use of investment capital, primarily through their return on fixed capital assets. High stock prices went to firms that extracted the most profit and growth from tangible assets or that owned the most valuable assets. These performance disciplines are well established and important. Yet management is the art of the best use of scarce resources.
Investment capital is no longer our scarcest resource.
In the customer economy, loyal customers have become the most precious commodity. Today the hardest thing for a company to acquire is not investment capital, products, employees, or even a brand. It's customer loyalty. Customer relationships are the fundamental source of value in the new customer economy. Customer capital is now at least as important as investment capital.