Customer Value Management Assignment - Homebase Company
Added on 2020-10-05
11 Pages3823 Words70 Views
CUSTOMER VALUEMANAGEMENT
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1(A) (P1) Various components that enable organization to determine customer lifetime value..1(b) (P2) Benefits of customer lifetime value..........................................................................2(c) (P3) Factors that influence CLV.......................................................................................3(d) (M1) Practical application of concept of CLV.................................................................3TASK 2............................................................................................................................................41) (P4) Types of market segmentation strategies...................................................................42) (P5) B2B and B2C decision making models......................................................................53) (M2) Various segmentation models in B2B and B2C.......................................................5TASK 3............................................................................................................................................61) (P6) Models to increase customer relationship and loyalty...............................................62) (M3) Methods apply at different stages of consumer decision making process................73) (D1) Key concept of CLV..................................................................................................8CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9
INTRODUCTIONCustomers are the key stakeholders of business unit. They highly contribute in thesuccess of organization. If entity is able to satisfy consumers then it can sustain in the market forlonger duration (Leroi-Werelds and et.al, 2014). Companies have to concentrate on needs ofconsumers and ways through which they can create value to the firm. For the present study,Homebase Company is being taken into consideration. It operates business in SMS basedbroadcasting. Furthermore, report will describe the segmentation models that can be applied inorganizations. In addition, it will critically analyse the concept of customer lifetime value. TASK 1(A) (P1) Various components that enable organization to determine customer lifetime valueCustomers are the lifeblood of firm that are valuable to business unit and contribute inenhancing its value in the market. Each firm aims to satisfy its consumers and make them loyaltowards the brand (Martinsuo and Killen, 2014). For that, they offer these consumers highquality products and services so that they will be loyal towards the brand and experience itsservices for longer duration. In the competitive environment, companies have to face high issuesin retaining consumers in the firm for longer duration. Customer lifetime value is considered astool that is used by most of the organizations to measure their net profit through specific group ofpeople. It helps in analysing the importance of customers to business. By calculating CLV, entitymakes strategies and arrange their monitory resources so that it can generate profit and becomeable to meet with the needs of these valuable consumers. In order to calculate CLV, companies have to deduct cost of services from profit gainedby entity (Nagaoka and et.al., 2016). This cost includes expenditure made by the business unitfor providing services to buyers and meeting with their needs. By calculating these expenditure,entity can examine its overall cost. In order to calculate CLV for Homebase Company, various things are taken intoconsideration. These are explained as below:Cohort analysis: It takes into consideration the necessary changes that have beenimplemented in business unit over a period of time (Stark, 2015). By this way, Homebasecompany can measure the effectiveness of changes in terms of whether these1
modifications have met with the needs of consumers or not. It includes seasonality,market changes, etc.Individualized CLV: In this, Homebase Company determines the value created byindividual customers in business through various channels (Verhoef and Lemon, 2013). Itincludes social media, digital marketing, etc.Average revenues' calculation per user: It is another component that helps indetermining profit generated through particular customer (Xu, Peak and Prybutok, 2015). (b) (P2) Benefits of customer lifetime valueCustomer lifetime value plays a significant role in the organisation. Through CLV,Homebase can get many benefits and improve its operational efficiency to a great extent.Benefits of this approach are explained as below:CLV approach is an effective tool that helps in determining actual assets of Homebase.These assets' identification helps organization in identifying its own financial position inmarket. By this way, it can make strategies to utilize these assets in an effective manner(Rihova, 2015).CLV is helpful in segmenting customers as per their value in business. Each person hasdifferent value in firm. There are some customers that create high value to entity.Through this approach, Homebase can make customer segmentation and identify itspotential buyers (Kim, 2015).CLV is an effective process that assists in resolving issues and minimizing complaintsfrom customers. If entity knows about potential customers then it will try to offer themquality services so that they will become loyal towards the brand. Thus, complains getsolved soon and it makes them loyal towards the entity (Ramaswami, 2016).Customer lifetime value is beneficial in sustaining customers in the brand for longerduration. It always tries to satisfy consumers by offering them quality products andservices. By this way, Homebase firm can retain its loyal consumers in the firm forlonger duration (Kotler, 2017). CLV is beneficial for organization in enhancing profitability of company. It always triesto hold customers who create value to the business so that these people will spend moneyin the firm. This helps in generating high revenue in the corporation. 2
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Customer Value Management Assignment Helplg...
|14
|4156
|89
Customer Value Management Homebase Company : Assignmentlg...
|16
|4865
|32
Customer Value Management Componentslg...
|17
|5296
|101
Introduction to Customer Value Management : Assignmentlg...
|12
|4041
|438
Customer Value Management Assignmentlg...
|12
|4130
|57
Customer Value Management of Homebaselg...
|12
|3906
|218