Customer Value Management Report

This report explores the importance of Customer Value Management (CVM) in enhancing customer relationships, loyalty, and satisfaction. It examines key components that determine customer lifetime value, analyzes market segmentation strategies, and outlines effective techniques for building lasting customer relationships.

Customer Value
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1. Constituent that help to find out consumer life-time value..............................................1
P2. Goodness of consumer time period value........................................................................2
P3 Component that powerfulness customer life value...........................................................3
M1 .........................................................................................................................................4
LO 2.................................................................................................................................................4
P.4. Find out and explicate the types of market cell division plan of action that can be applied
to client case...........................................................................................................................4
P.5. Valuate B2C and B2B determination making modes and prove how possibility for
customer value conception can be practical...........................................................................5
M2...........................................................................................................................................5
LO 3.................................................................................................................................................6
P6 Proficiency and Methods to indefinite quantity consumer relation and trueness.............6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Customer value management is crucial for business in order to increase customer
relationship, loyalty and satisfaction. The report will cover key components which help to
determine customer lifetime value along with its benefits. In addition to this, factors that affect
customer lifetime value, market segment strategies applied for the customer base and B2C and
B2B decisions making models will be described in this report. The report will finally
demonstrate different techniques and methods from which business will be able to increase
customer loyalty and make the relationship strong.
LO 1
P1. Constituent that help to find out consumer life-time value
It can be said that customer lifetime value and loyalty are two different aspects but also
work for the same purpose of increasing customer base in order to enhance profitability and
production. Customer Lifetime Value reflects the current total value of a consumer to Homebase
over its own lifetime (Keiningham, Aksoy and Cadet, 2017). The CLV concept implies that
every consumer or segment differ with respect to their business value. There are four functions
involved in CLV such as number of consumers, number of rime in which average customers
make purchase every year, average customer life and average profit per sale.
CLV = NC x NP x CL x PPS. The formula is useful for business in order to calculate the
customer lifetime value for entire consumer base or segment effectively.
The components of CM,i reference the contribution margin (CM) of an individual
customer (i). Contribution margin is customer revenue less variable cost associated with
customer demands and requirements. It can be said that the variable costs are directly and
proportionately vary with volume. CLV variable cost are costs of customer requirements and
demands in the case of customer sales value effectively.
Apart from this, there are a lot of factors which will help business as well as management
to determine and calculate customer's lifetime value such as purchasing behaviour, trends,
culture, average sales, interest and active engagement. This will help business to analyse whether
a customer is able to manage a long-time relationship with brand or not. This will help to make
an effective base in order to calculate customer lifetime value efficiently (Kelly, Male and
Graham, 2014). In addition to this, contribution margin and acquisition cost for a customer are
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the two main components of CVL formula and mechanisms is really important to compute
retention rate and discount rate.
P2. Goodness of consumer time period value
It can be said that there are so many benefits of customer lifetime value to Homebase in
order to increase revenues and profitability effectively. Here are some of them described as
below in context of organisation:
Effective consumer cell division: Customer lifetime value will assistance towards better
consumer identification and segmentation in order to offer different products and services. This
will help to attract customers and also addition revenues as well as profitability per consumer.
Increasing forecasting accuracy and lead conversation will also give indication of the worth of
effective leadership.
Better Forecasting: Customer lifetime value also help towards better forecasting of business
resources, management, profitability and production which help to increase the market share and
achieve desired goals and objectives (Kleinaltenkamp, 2015). It also helps to cut down the
production losses by guiding better towards strategies related to resource allocation in business.
This will also help to manage and control optimum investment in asset, inventory management
and workforce demands for the future.
Re-invent Loyalty management: It can be said that customer lifetime value is a good indicator
for developing and improving effectiveness and efficiency of operational activities. This will
also help to reduce the customer dissatisfaction. The firm should have effective knowledge of
customer requirements and demands in order to improve customer loyalty as well as behaviour.
Companies are also able to redesign the loyalty for a long time period.
Retention to customers: CLV can go a long way in predicting churn and enable design of new
program to reduce attrition effectively. Homebase is able to prioritise needs and requirements of
customers in the market in order to retain their satisfaction, requirements and loyalty towards
brand efficiently.
In addition to this, there are several benefits of the customer lifetime value such as better
marketing, brand loyalty, saving money, increase sales, save time of operational activities, etc.
The CLV also helps to demonstrate and measure bottom line financial impact of business
marketing activities. Management is also able to determine the impact of internal marketing as
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well as competitive program and environmental factors on long term profitability related to the
customer loyalty and satisfaction efficiently.
Thus, it can be said that customer lifetime value has a great impact on customers and
businesses in order to improve and develop profitability and production with effective benefits.
P3 Component that powerfulness customer life value
There are numerous factors which affect the customer lifetime value effectively. There is
no single answer of the question how long is the lifetime of customers value.?. Here some factors
described in order to understand influence it has on customer lifetime value:
Products and services: The lifetime of customer value is depended on the products and services
offered by Homebase in the market. For an example, quality products and services offered by
firm to the customers will help to increase brand image ad reputation which will also help
customers to experience something new and innovative in order to enhance satisfaction
(Sweeney, Danaher and McColl-Kennedy, 2015). This will help business to retain their customer
satisfaction as well as loyalty in order to enhance profitability and production.
Promise and service level: The firm is also liable for promises and considerations made during
promotion of products and services through advertising or any other thing to customers in the
market. It is very important for business to provide quality and effective services that it should be
according to product lives and promises made about it effectively.
Market stability: Market stability is also a crucial aspect that rapidly developing markets is
difficult to make sound projection of values of long term customer relationship management. It is
very hard for the firm to make strategies and plans in order to sustain business profitability and
production between so much rivalry and other competitive businesses effectively.
Business objectives: The objectives and goals of business should be financially strong, oriented
to different strategies and plans and the firm should have confidence of taking long term value
and view of customer lifetimes effectively (Peters, Verhoef and Krafft, 2015).
Thus, it can be said that there are some factors which affect business and its customer
lifetime values. This should be managed and controlled by organisation in order to enhance
profitability and production that helps to achieve desired goals and objectives.
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M1
Consumer Lifetime Value or CLTV is the immediate value of the approaching cash flows or the
value of enterprise attributed to the consumer during his or her integral relation with the
organization. It is multi-purpose metric used by commercialism managers specially at a time of
acquiring a customised.
LO 2
P.4. Find out and explicate the types of market cell division plan of action that can be applied to
client case
Marketplace partitioning is an plan of attack that can be practical by any administration in
terms of divide r the securities industry of potential bespoken into different-different groups and
segments on the footing of certain characteristics. Market partition is necessary part for
Homebase organisation in order to gaining proper customer base from its commercial enterprise
in certain form. The market segmentation can be utilised by its professionals in case of dividing
its specific customer base by using various effective approaches.
Gender base market segmentation: Gender can be considered as one of the most
appropriate factor for market segmentation approaches in order to dividing its variety of product
lines as per its existing customer case in marketplace (Lee, Hsiao and Chen, 2017). So it was find
out that, different types of gender has different interest, needs and wants of male and female
customer of Homebase organisation. As per its variety of different retail products, its
professionals require to classified its customer base according to gender basis and offering
products as per their requirements.
Age group base segmentation: It has stated that, marketplace can be segmented by
considering different age groups within existing market. Different age group has different-
different kinds of demands of various retail products. So as per age group of numerous customers
of Homebase organisation, the must deliver retail goods and services as per all age group
preferences at outlets. So it assists them to generating high amount of profitability within
business environment.
Income base segmentation: Homebase company also can segment their marketplace and
products strategies as per different group of income generation customers within existing
marketplace. It has examined that, high income group consumers has high range of purchasing
power and it may affect the profitability level of business in great manner (Suneetha and
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Megharaj, 2016). So as per different types of income group such as high income group, mid
income group and low income group. Its management team require to arrange their expected and
demanded products at workplace to raising sales of business.
P.5. Valuate B2C and B2B determination making modes and prove how possibility for customer
value conception can be practical
Varied of B2C and B2B strategy can be applied by Homebase organisation in terms of
generating wide range of profitability level and influencing upon targeted audience to buying
their targeted products within predetermined time period.
B2C marketing has always been different from B2B marketing in a numbers of key ways
so it influences upon its targeted customer bases in order to gaining expected response form
targeted marketplace (Arslanagic-Kalajdzic and Zabkar, 2015). It enforces the business to
investing more on social media net working strategy in order to sustain personal relationship
with co-workers. So varied of tactics can be applied by its professionals in order to creating of
personal and string relationship within other associate businesses in order to execution of
business activities in respective form. Apart from it, is also enforced the business to make
positive relationship with other parter businesses which is helping them to growing well in
industry. In this context, making engagement with existing customer base emotion can assist
Homegroup business to getting effective opportunities for creating well-managed customer
valuation that can give competitive advantage for the business.
In case of B2B strategy, Homegroup administration require to utilisation of such
assessment criteria of the business by which its professionals will be able to create some
targetting of their demographic values as per its customer valuation in marketplace. They have to
analyse the scope of business and attitudes of some other organisation in the same industry in
terms of execution of their strategies in respective form (Schwepker Jr, 2017). Get appropriate
feedback from audiences also can be proved beneficial practices for the organisation. So enable
business professionals to recognise the appropriate changes within the business environment and
extend funnel of B2B marketing strategies to reaching out to desired success or gaining proper
customer response from marketplace.
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M2
B2B service organizations led the way, but B2C companies are not far ... goals since schemes are
not equally effective at attaining all goals. Some of the most common segmentation methods for
B2B marketers, along ... B2B marketers leverage demographics in the same way B2C marketers
use ... You cannot assume all companies that opened up less than three years ago need ... This
model segments customers based on their needs.
LO 3
P6 Proficiency and Methods to indefinite quantity consumer relation and trueness
There are different strategies, tools and techniques used by various organisations in order
to improve and develop relationship with customers in the market in order to increase loyalty
which also help to enhance profitability and production for Homebase effectively (Gong, Choi
and Murdy, 2016). Here are some strategies and techniques related to customer relationship
management described below:
Collect and store personal information: The first formal thing should be managed by business
is collecting and storing personal information of customer while he or she purchases something
from brand effectively (Petri and Jacob, 2016). The personal information will help to get in touch
with customers in order to provide information regarding business new operations and policies.
The understanding between customer and organisation will help to create a solid impression to
produce right information and message which will be done by communication channel.
Target customers: Target customers are those people who are regularly connected with brand in
terms of purchasing products and services effectively. CRM approaches will help to know and
keep customers on track of top creamy layer. This is called target based allocation in order to
provide wonders of business effectively.
Regular updates: Contacting existing as well as new customers about the regular updates made
by business will also help to create awareness (Krämer and Burgartz, 2015). The personal
information and details will help to provide timely and regular updates regarding products and
services offered by business. This will sort them feel more valued, participating and part of
business household, which in turn will kind them prefer social group over another the next time
they want to do business concern.
Quick response: Quick response provided by businesses to customers will also help to realise
their importance towards brand which will help to retain customer satisfaction as well as
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perception. Any query or question regarding business operational or any other activities should
be solved by business management to utilise CRM approaches and customer experience with
brand effectively.
CONCLUSION
It can be concluded from the above report that there is a great importance of customer
and their satisfaction towards business point of view in order to increase profitability and
production. Contribution margin and acquisition cost for a customer are the two main
components of CVL formula. Customer lifetime value also has a great impact on customers and
businesses in order to improve and develop profitability and production with effective benefits.
In addition to this, there are some factors which affect business and its customer lifetime values.
Strategies, tools and techniques are used by organisations in order to improve and develop
relationship with customers in the market in order to increase loyalty and relationship.
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REFERENCES
Books and Journals
Keiningham, T., Aksoy, L. and Cadet, F., 2017. Operationalizing Relative Customer
Value. Journal of Creating Value 3(2) pp.184-192.
Kelly, J., Male, S. and Graham, D., 2014. Value management of construction projects. John
Wiley & Sons.
Kleinaltenkamp, M., 2015. Customer Value and Customer Selection. In Business Relationship
Management and Marketing (pp. 85-108). Springer, Berlin, Heidelberg.
Sweeney, J.C., Danaher, T.S. and McColl-Kennedy, J.R., 2015. Customer effort in value
cocreation activities: improving quality of life and behavioral intentions of health care
customers. Journal of Service Research 18(3) pp.318-335.
Peters, K., Verhoef, P.C. and Krafft, M., 2015. 10. Customer acquisition strategies: a customer
equity management perspective. Handbook of Research on Customer Equity in Marketing,
p.227.
Krämer, A. and Burgartz, T., 2015. Customer Value Controlling–Combining Different Value
Perspectives. Business and Management Studies 1(2) pp.11-19.
Petri, J. and Jacob, F., 2016. The customer as enabler of value (co)-creation in the solution
business. Industrial Marketing Management 56 pp.63-72.
Lee, Y.H., Hsiao, C. and Chen, Y.C., 2017. Linking positive psychological capital with customer
value co-creation. International Journal of Contemporary Hospitality Management 29(4)
pp.1235-1255.
Suneetha, S. and Megharaj, B., 2016. Elements of Japanese Value Delivery Process in Providing
Customer Value-with Special Focus on Jewellery Customers of Hyderabad &
Secunderabad. International Journal of Research in Finance and Marketing 6(10) pp.111-
124.
Arslanagic-Kalajdzic, M. and Zabkar, V., 2015. The external effect of marketing accountability
in business relationships: Exploring the role of customer perceived value. Industrial
marketing management 46 pp.83-97.
Schwepker Jr, C.H., 2017. Psychological ethical climate, leader–member exchange and
commitment to superior customer value: influencing salespeople’s unethical intent and
sales performance. Journal of Personal Selling & Sales Management 37(1) pp.72-87.
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Gong, T., Choi, J.N. and Murdy, S., 2016. Does customer value creation behavior drive customer
well-being?. Social Behavior and Personality: an international journal 44(1) pp.59-75.
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