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Customer Value Management - Report

   

Added on  2020-07-22

14 Pages4507 Words45 Views
Customer ValueManagement

Table of ContentsINTRODUCTION...........................................................................................................................1P1:Calculation of customer's lifetime value ...............................................................................1P2:The benefits of customer lifetime value to an organization .................................................3P3: The factors that influence the customer-lifetime value........................................................3P4: Type of market segmentation ..............................................................................................4P5: The B2B and B2C decision-making ....................................................................................6P6: The different techniques and methods that can be applied to increase loyalty of customers .....................................................................................................................................................8CONCLUSION................................................................................................................................9REFERENCES .............................................................................................................................10

INTRODUCTIONCustomer value management (CVM) is a measurement of organization view of customersof the perceived value for money delivered relative to that of their competitor customers (Casas-Arce, Martínez-Jerez and Narayanan, 2016).. It is also known ass customer value addedapproach. In terms of their overall profitability now and in the future the CVM can givecompany's way to evaluate individual subscribers. The tailored products and services to thecustomers are been given by CVM .This is been done in order to increase profits on anindividual customer level. In the face of rapidly decreasing process and potentially sloweracquisition growth CVM enables companies to mange their firm.Home base is a home improvement retailer and garden center with stores in the UK. Theproducts such as DIY tools paint and decor outdoor living kitchen etc. are been offered by thiscompany. In this report the advantages of customer-lifetime value to an organization will bepresented. Further more this report will present the different techniques and methods that can besued in order to increase the customer loyalty in the company.P1:Calculation of customer's lifetime value The companies with total focus on the customers will be the winner in this world ofextreme competition. The importance of customer satisfaction must be understood by thecompanies and the process need to be build around it. The loyalty of customer will be more if thecustomer is satisfied. In the market there are large offerings of products and servicesavailable .Only that product will be purchased by the customer that will give them maximumperceived value. From the calculation of the cost associate with emotional level of decision thisvalue comes from. After considering the total cost of associated with purchase, perceived andother use the consumer will take decision. If the performance of the product is as per theexpectation of the customer then it is considered as customer-satisfaction. The product will bepurchased by the completely satisfied customers (Özyörük and Kavak, 2017.)..The prediction is been made in the market through the customer lifetime value (CLV).Tothe entire future terms with customer the net profit is attributed. In order to understand thecustomer lifetime value is the single most important metric that is used. Aboutsales, ,marketing , product development and customer support the important decisions will bemade by the company Home page. For an instance the amount of money that will be invested bythe company in order to do marketing of its products. In order to retain the customer and support1

the services the money that is to be spend will discuss by the company through CLV. Theadvantageous of using CLV are as follows-:On multiple marketing approaches it forces the business to depend on instead of relying on justone- In order to draw in the most valuable customer the customer lifetime value forces a businessto consider social ,viral and conventional marketing practices.For scalability it provides a chance to plan – On a daily basis if a business is aware their the bestcustomer are going to spend money on the product then there is a chance to plan for scalability.In the meaningful segment it naturally divides a targeted demographic – When applyingcustomer lifetime value the customer segmentation naturally occurs. Every segment this actuallybenefits as it allows a business to recognize what are the needs of each segment requires.The emphasis of success squarely on the customer is placed – By forcing the business to analyzethe accomplishment of their customer instead the customer lifetime value switches the dynamic .In order to calculate the customer lifetime value the various variables are need. They are asfollows-:Average order value – With this the average is been given which is spent on each site with eachnew order that is made. It is very essential as it helps to decide whether one should increase thefrequency or to increase the average order value . Average order value = Total revenue/ number of daysPurchase frequency – In a given time period the purchase frequency will let the company knowabout the number of time a customer will purchase product from their store. It is also essential asit let the company whether the customers are buying product from their store or not.Purchase frequency – Number of order/ unique customersCustomer value – There is a customer value before there is customer lifetime value. The value ofcustomer average ordered is multiplied by their purchase frequency in this. During the timeframe this will give the value of a customer that can be used to calculate average order value andpurchase frequency (Zhang, Liang and Wang, 2016.).Customer average lifespan – Before the customers drop off and go dormant a customer averagelifespan is the average time of a customer remains active.CLV= Customer value * Storage average lifespan 2

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