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Customer Value Management Assignment - Homebase

   

Added on  2020-10-04

12 Pages4205 Words92 Views
Customer Value Management

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Components that enable determination & calculation of customer's lifetime value.........1P2 Benefits of Customer Lifetime Value...............................................................................2P3 Factors that affect customer lifetime value.......................................................................3TASK 2............................................................................................................................................4P4 Types of Market Segmentation Strategies applied to customer base................................4P5 B2B and B2C models of decision making and opportunities value creation can be applied6TASK 3............................................................................................................................................8P6 Different techniques and methods can apply to increase customer relationship and loyalty8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10

INTRODUCTIONCustomers are considered as end user of any product and services and to provide themmaximum satisfaction, it is required for company to know about their needs and wants (Keyteand Locher, 2016). It is required to value those feedbacks which are provided by them; thus,issues will get resolved. This assignment is based on Homebase which is set up in UK. Companyhas to analyse customer lifetime value and their factors; thus, they will promote appropriateworking. This project will going to evaluate about the various consideration and componentswhich enable in determine the customer lifetime value. There will be various future and longterm benefits are associated with the customer lifetime value so that better and effective gaincould be impose properly. There will be certain number of factors get underpin which impactedthe customer lifetime value at some extent. TASK 1P1 Components that enable determination & calculation of customer's lifetime valueHome is utilizing an essential techniques which is known as Customer's lifetime value.With assistance of this, forecasting will be done; therefore, an appropriate relationship withclients will be created (Kerzner and Kerzner, 2017). In this manner, long term relations will bemaintained. Company has to calculate CLV because with help of this periodical value will beidentified between users and firm. Elements which are related to this:Present value: This kind of rate is related to continual purchasing behaviour of clients. Itis termed as discounted rate associated with cash flow. With support of time value of money(TVM), it will be determined. Customer Loyalty: If company is providing best quality of products to clients then thiswill help them to retain loyal for firm for maximum period of time. But if they are less satisfiedthen, purchasers will switch to other brand. Therefore, it can be understood that loyal individualsaid to render benefits to affiliation. This assists to increase revenues and productivity (Kumarand Reinartz, 2016).Mathematical formula: BY calculating CLV, superior of Homebase will take aneffective decision. There is a specific formula for this:Formula: Total profit/ number of months since client joinedWith aid of this, average profit will be found out and instead of this, another formula will beused:1

CLV: ((T*AOV) AGM) ALThere, T: Average monthly transactionsAOV: average order valueALT: average customer lifetime (in months)Details:Here, R: Monthly retention rateD: Monthly discount rateCohort analysis: This is group evaluation of persons whose characteristics are muchsimilar to each other (Nyadzayo and Khajehzadeh, 2016). Therefore, they will analysedthrough same technique. Fundamental advantage of this, it takes minimum time. Alongwith, difference will be common which affect customer lifetime value.Individualized CLV: With assistance of this, adequate examination will be done becauseit aids to concentrate on every individual's behaviour and their attitude. For above statedaim, previous and present information will be utilized. Relationship marketing will assist company to maximize lifetime value. Everest HomeImprovement is using this method and as Homebase is operating their business in same sector;therefore, they will use it because it enables them in improvisation of revenues and maintainingcustomer base effectually (Pearson, 2016).P2 Benefits of Customer Lifetime ValueIn recent time, it is fundamental for each organisation to pay maximum attention toidentification of CLV. After this, positive results will gained by an enterprise and they will alsoutilize this method into operational activities (Zhang and et. al., 2017). It provide growth anddevelopment to an association and they will increase their revenues. There are certain advantagesrelated to this mentioned as below:Effective customer segmentation: An enterprise will classified customers into varioussegments; therefore, they will fulfil their desired properly. For this, CLV will be utilized by2

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