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Customer Value Management Components

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Added on  2020-10-23

Customer Value Management Components

   Added on 2020-10-23

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Customer valueManagementTable of Contents
Customer Value Management Components_1
INTRODUCTION...........................................................................................................................1TASK1.............................................................................................................................................1P1 Components that enable calculation and determination of buyer's lifetime value ..........1P2 Benefits of Consumer Lifetime Value..............................................................................3P3 Element that affect consumer lifetime value.....................................................................4M1 Concept of customer life time value................................................................................5TASK 2............................................................................................................................................6P4 Kinds of Market Segmentation Plan of action applied to clients base..............................6P5. B2C and B2B models of decision making.......................................................................7M2 Evaluation of segmentation models.................................................................................9TASK 3............................................................................................................................................9P6 Different methods to improve customer relationship and loyalty.....................................9M3. Appropriateness of techniques and models in consumer decision making process......10D1 Concept of customer life time value...............................................................................11CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12
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INTRODUCTIONCustomer value management is a measurement of perceived economic value of moneyprovide to their clients as compare to their competitors consumers, it also called customers worthadded conceptualization. It help management to know accurate determine what is the maindriving 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 andservices by offering high quality goods (Ascarza and et. al., 2016). Thus help to achieve goalsand objectives in limited period of time effectively. In this report select Homebase to the impactof CVM on company performance. It is a British home transformation retail organisation withalmost 214 store across United Kingdom. Homebase sold to Wesfarmers in the year of 2016 andthey start rebranding of existing brand. In this assignment covers components and determinationof buyers lifetime value and its benefits as well as element that effect it. Report also includesmodel of B2B and B2C etc. TASK1P1 Components that enable calculation and determination of buyer's lifetime valueMarketing manager of Homebase has used individualized CLV technique to calculatedpast as well as present information which help to make action of plan for long period of timeCompany has established relation with their clients for month with the value of £ XYZ. Someimportant element of CLV has detail below: Present Value: It mean amount that clients has ready to pay in current marketenvironment for purchase some product and services. It also shows frequency ofrepetition 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 consumerslife 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 ofindividual. For example, if person can not satisfy organisation goods then they have notloyal toward firm resulted repurchase of existing commodities by that clients should bestop, so that firm want to offer higher quality product to person in order to retain them1
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and enhance loyalty factors. Through this, institute gain higher profitability and if thereare no loyalty then it create negative impact on their performance (Kotler, 2017). Mathematical Formula: To analyse customer's life time value, manager of thecompany has used numerical formula that is mathematical expression of worth ofproduct in individual eye. Through this, firm take right decision related feature, qualityetc. of goods as well as services (Di Benedetto and Kim, 2016). In this instructionincludes number of individuals, total revenue etc. for example, if organisation have 100consumers 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 asprofitability of the company. By CLV, management has able to take right decision inorder to run whole business activities in an effective manner. Mathematical formula ofCLV detail below: CLV = ((T x AOV)AGM)ALTHere; AOV = Average Order ValueT = Average Every month transactionsALT = Average clients Life duration In Detail: Here; R = Monthly Retention Rate D = monthly Discount RateCohort Analysis: Study of group of individuals that have same perception, thinking,personality traits, motivation factors, attitude etc. Management has find out this clusteron 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 butvariations arise negative effect on method which may affect discovery of person lifetime worth. Individualized CLV: Most of organisation has used individualized CLV method inorder to gain higher accuracy in outcome. Through this, firm has focus on each and2
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