Customer Value Management : Report

Added on - 21 Jul 2020

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CUSTOMER VALUEMANAGEMENT
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Various components that enable organisation to determine CLVs...................................1P2 Benefits of customers lifetime value to the organization..................................................4P3 Factors influence customers lifetime values.....................................................................5TASK 2............................................................................................................................................7P4 Types Market segmentation strategies that can be applied to customers base..................7P5 B2C and B2B models of decision making and application of customers value creation..9TASK 3..........................................................................................................................................11P6 Different techniques and methods used by enterprise to increase customer relationship11CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................13
INTRODUCTIONCustomer value management is the most important measure of organisation's view of itscustomers of the perceived value for funds delivered relative to that of their competitors’customers. It is also considered as powerful business tool for companies because it connects theircustomers to the key performance indicators by directly analysing the drivers of purchasingbehaviours (Weinstein and Pohlman, 2015). Impact of these will have upon the delivering KPIssuch as profit and loss, recommendation, share of wallet, market share and return on investments.Present report is based on customer’s value creation for Home Base which is British homeimprovement retailer brand and garden centre along with the stores across the UK and republicof Ireland. Case study of company has been analysed in order to determine the variouscomponents that enable the organisation to create value among the customers. Further, as newmarketing manager of Home Base, there are several benefits of customers lifetime values to theHome base have been discussed along with the factors that influence their CLV. Moreover, B2Band B2C models of customers decision making have also been discussed along with the majoractivities that bear on the revenue and profitability potential of retail sector. At last, someimportant tools and techniques used by company for creation of value of products and servicesamong customers through marketing have been evaluated in this report.TASK 1P1 Various components that enable organisation to determine CLVsFrom the effective market research, it has been analysed that customer always seeks tomaximise value by analysing and estimating which products or firm will deliver the mostvaluable products and services. Organisations in retail sector needs to understand that valueamong the customers have created by forming an expectation of value and acting upon it alongwith their usage of experience against their expectations (Goetsch and Davis, 2014). In presentcontext, Home base retail has achieved customer’s satisfaction by meeting their expectations andprovided innovative products and services to increase the market share. Satisfaction of customeris defined as the person feeling of pleasure or resulting from comparing a perceived performanceof a product in the relation individuals expectation. In Home base, customer's retention is also animportant market oriented strategic planning in which the manager of enterprise will have toretain customers through development of high barrier, providing them high level of satisfactionand implementation of relationship marketing. According to various research and analysis, it is1
being confirmed that consumer will purchase the products which provide them maximumperceived value. Value of customers towards Homebase products will come from calculation ofcost associated with emotional level decision like brand, sales personnel, corporate brand andfunctional image etc.Customer’s lifetime values are the most common and single significant metric that helpsin understanding the customers. It provides a predication to cited organisation about the value oftheir products and services between the customers as compared to rival brands in market whichprovides similar quality products at low cost (Stark, 2015). In this, managers of Home base willbe able to calculate the customer's lifetime value by subtracting the cost of acquiring productsand serving a consumer from the amount gained from customer and by analysing the accountstatistics like customer's expenditure per visit, total number of visit and then it's can bedistributed to analyse the average customer value per week or year.Some important components which are used to calculate CLV for a company is:Average revenue per user: It determines the Average revenue earned by company fromcustomers per month and then the value with the 12 and 24 in order to get annual orBiannual CLV of Home base.CohortAnalysis: It involves different factors that drive changes in the company withinspecified time duration. It helps the organisation to analyse those changes in thecustomers requirements with the passage of time. Calculation CLV of Home Base inCohort analysis is based on the factors such as market changes, seasonality and customersrequirements.IndividualizedCLV: It is used to identify the total value created by individual customerthrough various channels, campaign and other mediums such as coupons.Merits of customers lifetime values.Saves funds: CLV is the most effective and cheaper method that assists the manager ofHomebase in retaining their old customers rather than finding new ones. When theorganisation will understand their customer’s expectation and then will focus oninnovating the products and services rather than influencing the customers (The 5Benefits of Customer Lifetime Value, 2016). It saves the money of organisation whichthey spend on occupying channels for finding new customers which are very expensiveand time consuming.2
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