Customer Relationship Management

The provided document is an analysis of customer relationship management (CRM) and customer value. It includes a review of CRM successes, advances, pitfalls, and futures, as well as discussions on customer equity, value management, divided attitudinal loyalty, and customer-to-customer value co-creation in tourism. The assignment also covers ethical leadership in salesforces, product lifecycle management, and customer value paradigms. Additionally, it provides information on tools of CRM and a summary of key points in a paragraph.

Customer value
Management
Table of Contents

INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
P1 Components that enable calculation and determination of buyer's lifetime value ..........1
P2 Benefits of Consumer Lifetime Value..............................................................................3
P3 Element that affect consumer lifetime value.....................................................................4
M1 Concept of customer life time value................................................................................5
TASK 2............................................................................................................................................6
P4 Kinds of Market Segmentation Plan of action applied to clients base..............................6
P5. B2C and B2B models of decision making.......................................................................7
M2 Evaluation of segmentation models.................................................................................9
TASK 3............................................................................................................................................9
P6 Different methods to improve customer relationship and loyalty.....................................9
M3. Appropriateness of techniques and models in consumer decision making process......10
D1 Concept of customer life time value...............................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Customer value management is a measurement of perceived economic value of money
provide to their clients as compare to their competitors consumers, it also called customers worth
added conceptualization. It help management to know accurate determine what is the main
driving factor of buyers in order to measure organisation performance in long period of time.
Through this activities firm are able to reach large number of individuals toward product and
services by offering high quality goods (Ascarza and et. al., 2016). Thus help to achieve goals
and objectives in limited period of time effectively. In this report select Homebase to the impact
of CVM on company performance. It is a British home transformation retail organisation with
almost 214 store across United Kingdom. Homebase sold to Wesfarmers in the year of 2016 and
they start rebranding of existing brand. In this assignment covers components and determination
of buyers lifetime value and its benefits as well as element that effect it. Report also includes
model of B2B and B2C etc.
TASK1
P1 Components that enable calculation and determination of buyer's lifetime value
Marketing manager of Homebase has used individualized CLV technique to calculated
past as well as present information which help to make action of plan for long period of time
Company has established relation with their clients for month with the value of £ XYZ. Some
important element of CLV has detail below: Present Value: It mean amount that clients has ready to pay in current market
environment for purchase some product and services. It also shows frequency of
repetition buying by potential buyers at market place (Chacour and Ulaga, 2015).
Present worth of goods has been calculated by time value of money that has consumers
life time value which depend of customer's retention of long period of time. Customer Loyalty: It help management to forecasting commodities and services sales.
CLV has depend on consumer's loyalty because it shows retention time period of
individual. For example, if person can not satisfy organisation goods then they have not
loyal toward firm resulted repurchase of existing commodities by that clients should be
stop, so that firm want to offer higher quality product to person in order to retain them
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and enhance loyalty factors. Through this, institute gain higher profitability and if there
are no loyalty then it create negative impact on their performance (Kotler, 2017).
 Mathematical Formula: To analyse customer's life time value, manager of the
company has used numerical formula that is mathematical expression of worth of
product in individual eye. Through this, firm take right decision related feature, quality
etc. of goods as well as services (Di Benedetto and Kim, 2016). In this instruction
includes number of individuals, total revenue etc. for example, if organisation have 100
consumers and receive 10000 US dollar as revenue then CLV is total number of buyers /
total revenue = 100 / 10000 = 0.001. Thus shows person satisfaction as well as
profitability of the company. By CLV, management has able to take right decision in
order to run whole business activities in an effective manner. Mathematical formula of
CLV detail below:
 CLV = ((T x AOV)AGM)ALT
 Here; AOV = Average Order Value
T = Average Every month transactions
ALT = Average clients Life duration
 In Detail:
Here; R = Monthly Retention Rate
D = monthly Discount Rate
 Cohort Analysis: Study of group of individuals that have same perception, thinking,
personality traits, motivation factors, attitude etc. Management has find out this cluster
on that time when they have get life time value of consumers (Kumar and Reinartz,
2018). Cohort has consumer time as more then one customers has examine but
variations arise negative effect on method which may affect discovery of person life
time worth.
 Individualized CLV: Most of organisation has used individualized CLV method in
order to gain higher accuracy in outcome. Through this, firm has focus on each and
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every individual purchaser behaviour toward firm goods and services along with
potential rival at market place. (Schwepker and Ingram, 2016).
P2 Benefits of Consumer Lifetime Value
By executing CLV method enterprise has enhance operational task that improve
productivity as well as profitability of the company. Some crucial profit has CLV has detail
below:
Re-invent Royalty of Management – Wesfarmers is a now owner of Homebase firm and
they are rebrand all goods as well as services in order to build new positive image of the
company in clients mind. Through this, they are reinvent loyalty among individual that help to
gain higher person satisfaction as well as market position (Keyte and Locher, 2016).
Wesfarmers has used CLV in order to get information related to improvement area to offer better
commodities, services. By this, they are redesigning their all plan to produce product with high
quality.
Price Setting – For this, management has get information related to individual needs,
wants, preferences, perception, competitors strategies etc. to fix goods price. Company has
implementing market research to know person disposable income as well as their purchasing
capacities (Rihova and et. al., 2015). That data help organisation to take right decision of
modification in existing commodities accordingly choose prices, it provide higher customer's
satisfaction.
Better Forecasting – By using CLV methodologies firm are able to know future needs
and wants of market as well as focus consumers that help to take right decision in order to
enhance operational work effectively. Homebase has execute forecasting strategies by using
CLV plan thus increase overall sales by 20% in year. Through this, enterprises has capable to
rise sales volume in future period and attract many consumers toward organisation commodities,
services. Referred firm has gain growth by offer SMS services to their target buyers (Weinstein
and Pohlman, 2015). With the help to CLV, marketing manager of enterprise has find out
opportunities of future clients requirement thus help to run whole business activities in long
period of time effectively.
Retention/Win Back of Customers – Wesfarmers has develop strategies in order to retain
as well as win back their potential consumers at market place. Homebase used SMS services by
retraining individuals through this they are gain 20% improvement in their work. For this,
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marketing manager use CLV to conducting market research to identify person needs and wants
by which they are produce goods, services accordingly to full fill their demand at market place
(Ramaswami and Arunachalam, 2016). Through this, institution has offer high quality product to
person and retain them in long period of time effectively.
Effective Customer Segmentation – Management of the company has effectively
segmented market according to customer's needs and wants. They are make customized goods as
well as services in order to full fill person demand in an effective manner (Weinstein and
Pohlman, 2015).
Homebase has analyse customer's life time value to retain individual as well as
forecasting future trend accordingly they are produce product and services in order to achieve
goals and objectives I limited period of time effectively. By this Wesfarmers has rebrand
existing commodities by CLV plan to attract large number of people toward organisation and
build positive image at market.
P3 Element that affect consumer lifetime value
By using CLV firm are able to make strong relationship with their customers in long
period of time. Company has identify their loyal consumers and analyse their purchasing
behavioural which help to draw future strategies to achieve market position. In addition to this,
they are take effective decision related to promotional activities, commodities development or
modification, buyers supports etc. (Raithel, Taylor and Hock, 2016). Management of enterprise
has used CLV as a effective tool of making or developing loyalty among customers at market
place. By this, they are able to full fill clients demand that has change with time so that
organisation has implemented this plan time to time basis in order to gain sustainability in long
period of time.
Elements those affect Customer Lifetime Value are detail below:
What type of product you sell: Product is a most important element for an organisation
because customers consume this and make judgement about entire firm. So that, it is a only
factor that make relationship between individuals and enterprise. That is why, administration has
offer quality of goods by implementing CLV to their buyer in order to build positive brand image
in their mind about firm as well as its commodities. If they fail to full fill person demand then it
create negative impact on their performance (Yang and et. al., 2012). For example, product life
cycle has provide data related to future trend of current goods and services.
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Service and Promise Level: Company make only those promises those they are able to
full fill through this they are build positive image at market place. So that, customers feel they
are receive right value of their money and effectively fulfil their demand. By CLV, organisation
has capable to retain large number of individuals and make them loyal by completing all
promises in given time frame (Minnema and et. al., 2018). For example, car manufacturing
company has promise their buyer to provide two care services free with in a year and fulfil that
promise effectively by this they are make loyal consumers which provide high brand value as
well as sustainability.
Market Stability: In present market environment, stability is very low because people
needs has continuously change with change in market trend. In order to know clients want,
organisation has identify behaviours, attitude, perception and many more to produce product that
full fill demand in an effective ways. Frequently change in taste as well as preferences of
individuals, enterprise has enable to add some value every time according to people so that they
are used CLV in order to forecasting future trends effectively. For example, Wesfarmers
rebranding homebase goods to gain sustainability in long period of time.
Company's Objective: Each and every organisation has established their aim to carry
out whole business activities in long period effectively. Their objectives has affect customers life
time value positive as well as negatively. So that CLV is very effective for firm and
management CLV responsibility to manage their image positive in consumer's mind for make
higher profitability and reduce negative impact of goals on firm performance (Martinsuo and
Killen, 2014). For example, McDonald has focus on their profitability thus create negative image
of the firm at market that they can not think about their clients they are only prefer profits, so that
firm reduce their market position and face losses.
Above mention all element has effect CLV of Homebase and management of
Wesfarmers has develop strategies to attract large number of consumers at market place. By this,
they are able to make healthy as well as strong relationship with individuals by consider all
factors which help to achieve aim, objectives in limited period of time in appropriate ways.
M1 Concept of customer life time value
In order to run whole business activities effectively, management of the company has
develop strategies to forecasting value of customers in long period of time which help to gain
higher clients satisfaction. No one has aware about how long their relationship with buyers
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should be work. So that, organisation want to calculate consumers life time value (CLV) that
explain periodical worth in order to make strong relationship between enterprises and customers.
TASK 2
P4 Kinds of Market Segmentation Plan of action applied to clients base
Market segmentation is a process in which administration of the company has divided
target consumers into controllable as well as manageable group and they all members has same
needs, preferences, attitude, perception, motivation factor, learning style and many more.
Through CLV, enterprises able to know market demand and future trends accordingly they are
produce product in order to develop loyal buyer those has repurchase existing goods and spread
positive mouth publicity, thus enhance profitability and sustainability of firm effectively (Leroi-
Werelds and et. al., 2014). This all information help management to take right decision to run
business task and manage persons portfolios. There are five method of market segmentation
which has detail below:
Demographic: It is a most common method of dividing market into manageable part
accordingly to company needs and wants. In each one section people have same kind of
preferences, taste, culture etc. These factor has run affect organisation performance that is why
they are consider CLM before taking any decision of selling product in that area. Several other
elements education, marital status, gander, age, religion, job, social class and many more has also
create positive as well as negative impact (Lee and et. al., 2015). So that, Homebase has analyse
these all factor and increase their user of SMS services in target location. Their offer of text
messaging has depend on age factor so that they want to focus on that area to increase profits.
Demographic segmentation strategies only help full for large organisation that want many clients
with little discrimination of preferences.
Geographic: In United Kingdom, social cultural environment has change with location
so that firms has find out area where their product should be sell or have some opportunities to
gain profits. Homebase provide networking services to their buyer and geographical location has
create issues of less network availability that create negative image of the company at market
place and individual has switch their services brand with other enterprises SMS facilities. But,
Homebase can not do anything in this problem because low network has provided by
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government. For this, management of the company has consult with UK authority to remove
communication system issues then they offer SMS services in that location.
Psycho-graphic: In current environment, each person has their own thinking and
opinion about certain things which shows their psychological behaviour. It cover habit, interest,
lifestyle, attitude, belief and many more. Organisation has consider CLM these element to take
right decision related to sell SMS facilities to all customers (Kumar and Reinartz, 2016). So that,
it is a management responsibility to analyse clients need and their psycho-graphic behaviour
about goods and services accordingly they are offer commodities which help to attract large
number of individual toward organisation with high loyalty.
Behavioural: Behaviours of the people can be change but is a very complex process and
each one organisation can not able to do that in an effective ways. So that, Homebase has divided
their market accordingly to behavioural aspect. In each one section, all person has same kind of
behavioural traits that help them to offer goods in an effective ways in order to achieve goals in
given time frame. In present market of CLM, digitalisation has on boom so that SMS services of
the company has lot of opportunities in industry.
Combination Strategy: Almost all organisation what every is small and large has used
combination strategies because market are dynamic and customer's demands are unlimited. So
that, manager has choose multiple action of plan in order to full fill need of target consumers
effectively (Kerzner and Kerzner, 2017). Through this, company has able to increase sales by
20% in a year thus enhance performance as well as market position.
P5. B2C and B2B models of decision making
Decision making process has changed with company to company, in this management
has played very important role in order to make decision according to market demand. In present
business environment, there are two type of enterprises B2C and B2B or both have their own
strength as well as weakness which effect firm decision positively or negatively. Business to
business and business to consumer two kind of commercial enterprise has effective work and
associated judgement has detail below:
Decision Making
Process
Business to Consumers Business to Business
Classical and  In this mode, manager of the  Classical as well as rational
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Rational Model company has take decision
according to customers
demand at market place. It
called rational decision
making process.
 They are used B2C classical
decision approach to
identifying problem which
affect judgement positively as
well as negatively.
 This model is very beneficial
for an organisation that help
to achieve goals effectively.
decision model can not
implemented into B2B firm
because it more focus on their
product as compare to human
being (Hammer, 2015).
 It create negativity effect on
organisation performance and
productivity in long period of
time.
 B2B unit have large scale
operational activities so that
this method can not helpful
for them to run enterprises
effectively.
 Big company can not focus
on one objectives they are
multiple goals so that
manager of that firm not used
this method to take decision.
Administrative
Model or
Bounded
Rationality
 In this, framework covers
target customers to sell
product (Goetsch and Davis,
2014).
 It is essential for
administration to consider all
necessary alternatives
method.
 There have engagement
between management and
decision - making process
positively that help to achieve
aim effectively.
 There are several choice are
addressable for company to
analyse need of decision.
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 B2C may be small as well as
large according to their
market so that available
alternative has shows
minimum effect on
organization performance.
Retrospective
model
 Firm are trying to convince
individuals to purchase
commodities and services in
offer price.
 In B2B unit demand of the
product has exist and
organisation can not have
number of option. So that,
owner of firm make offer
according to other enterprises
demand effectively.
M2 Evaluation of segmentation models
Marketing manager of Homebase divide their target market into two parts. In one section
those person has select that used SMS services in another part people can not use this facilities.
Both group has different opinion about company product and service, it help management of take
right decision related to promotional strategies, sales, quality of goods and services or many
more Retrospective model Firm are trying to convince individuals to purchase commodities and
services in offer price .In B2B unit demand of the product has exist and organisation can not
have number of option. So that, owner of firm make offer according to other enterprises demand
effectively.
TASK 3
P6 Different methods to improve customer relationship and loyalty
There are various kind of tool and techniques has exist at market place in order to build
strong as well as healthy relationship between organisation and its customers, thus help to
achieve goals and objectives in appropriate manner in specific period of time. That increase
customer's satisfaction as well as market position in long period of time it enhance profitability
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and sustainability. All these work has essential to develop loyalty in buyers. In order to translate
this all discussion into more better ways there are some methodologies that help to improve
consumer relationship has explain as follows: Emails: In modern era, E- mail has in trends so that most of an organisation has make
attractive massage content and mail it to all potential buyer or to be buyer. That help
them to get attraction of large number of customers by CLM toward company goods and
services in long period of time effectively. It help to make healthy relationship with
consumers for long period. SMS: Personal massage is another method of make relationship with clients at market
place. Through which organisation has able develop loyalty which help to take
advantage of profitability in long period of time (Chacour and Ulaga, 2015). Massage
content is very important element so that marketing manager has focus on that area and
make attractive CLM strategies, innovative or present product information in new ways
to gain benefits of SMS services. Telephone: Now days, it is very less attract method to build relationship because clients
can not ready to take with unknown person for services which may be beneficial or not
for them. But in after sales services, telephonic feedback as well as problem solving call
may build positively in individual. So that, this mode of relationship building has helpful
for existing customers rather then new clients at market place.
 Internet: Now days, internet as well as social media networking has very effective to
develop healthy relationship between company as well as people. Management of
Homebase has used this CLM as well as CLV plan in order to attract large number of
customers toward organisation commodities and services in an effective ways thus help
to create loyalty among individuals resulted high profits should be gain (Ascarza and et.
al., 2016). Some internet site which are mostly used by firm for promotional activities is
Facebook, twitter, Instagram, YouTube and many more.
All strategies which has mention above has implemented by Wesfarmers in order to
rebrand Homebase goods. It help to gain large attraction of large number of customers toward
organisation product as well as services effectively. Through this they are able to achieve loyalty
factor in consumers and goals.
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M3. Appropriateness of techniques and models in consumer decision making process
Marketing manager of the company has organising research program in order to know
needs of buyer at market place through this they are able to produce high quality product as
compare to competitors which help to compete them effectively (Di Benedetto and Kim, 2016).
Some of techniques are:
 Emails
 SMS
 Telephone
 Internet
D1 Concept of customer life time value
In business environment Customer Life Time Value is very dynamic in nature there are
very high competition so that various company has start attention on clients loyalty as well as
CLV. By implementing this method, management has able to know individual thinking about
their goods and find out gap between actual as well as desire outcome. In order to full fill this
gap they are develop strategies to produce high quality commodities and services to achieve
goals, thus build positive goodwill by offering differentiate product at market place.
CONCLUSION
From the above report it is concluded that customer value management is a key factor of
success in current market. So that each one organisation want to implemented CVM as well as
CLV strategies in order to build loyalty among consumers through which repurchase of same
product has increase profits. It help to promote goods by mouth publicity and create positive
impact on individual mind. E mail and internet both have very effective mode of develop
relationship with people in the industry.
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Online
Tools of customer relationship management. 2017 [Online]. Available through:
<https://www.google.co.uk/search?
q=tools+of+customer+relationship+management&source=lnms&tbm=isch&sa=X&ved
=0ahUKEwiJtLCxlZHZAhVDuI8KHWVwArkQ_AUICigB&biw=1319&bih=604#img
rc=xArC8dJ25vAzfM:>.
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