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Customer's Lifetime Value MANAGEMENT INTRODUCTION 1 TASK 11 P1 Components that enable an enterprise to determine and calculate customer's lifetime value

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Added on  2020-11-23

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CUSTOMER VALUE MANAGEMENT INTRODUCTION Cohort 1 TASK 11 P1 Components that enable an corporation to determine&calculate customer's lifetime value 1 P2. Factors influencing the customer lifetime value3 M1 The concept of customer lifetime value 4 TASK 24 P4 Type of market segmentation that can be applied to a customer base 4 P5 B2C and B2B decision making models6 M2 Evaluation of segmentation 8 TASK 38 P6 Various techniques and methods to enhance customer loyaltyand relationships 8

Customer's Lifetime Value MANAGEMENT INTRODUCTION 1 TASK 11 P1 Components that enable an enterprise to determine and calculate customer's lifetime value

   Added on 2020-11-23

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CUSTOMER VALUEMANAGEMENT
Customer's Lifetime Value MANAGEMENT INTRODUCTION 1 TASK 11 P1 Components that enable an enterprise to determine and calculate customer's lifetime value_1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Components that enable an corporation to determine & calculate customer's lifetime value................................................................................................................................................1P2. Benefits of customer lifetime value to an enterprise........................................................2P3. Factors influencing the customer lifetime value..............................................................3M1 The concept of customer lifetime value...........................................................................4TASK 2............................................................................................................................................4P4 Type of market segmentation that can be applied to a customer base..............................4P5 B2C and B2B decision making models.............................................................................6M2 Evaluation of segmentation..............................................................................................8TASK 3............................................................................................................................................8P6 Various techniques and methods to enhance customer loyalty and relationships.............8M3 Appropriateness of techniques.......................................................................................10D1.........................................................................................................................................11CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12
Customer's Lifetime Value MANAGEMENT INTRODUCTION 1 TASK 11 P1 Components that enable an enterprise to determine and calculate customer's lifetime value_2
INTRODUCTIONCustomer value management is taken as a tool that creates a link between consumer andKPI. This concept shows that superiors of a company has to manufacture products or services asper trends of market (Hammer, 2015). In order to increase the performance of sale and improvebrand image, an association needs to measure the drivers of purchasing behaviour. This reportshows the impact of customer's behaviour on business of a company of UK named byHomebase. It is a home improvement retailer firm which has founded by Sainsbury. Currentlythis association needs to improve its sales by 20%. Therefore, this assignment discuss thedifferent factors which affect customer base and profitability of company if managers get successin retaining them for longer period of time. For this assistance, employers need to take properdecisions in understanding the value of customers through which they can provide highsatisfaction to them as well as gain their loyalty for long terms.TASK 1P1 Components that enable an corporation to determine & calculate customer's lifetime valueManagers of Homebase Company use customer lifetime value as a tool which forecastthe value through which they can generate high revenues. It is considered as an important part inbusiness environment because when people used to purchase goods and services in bulk thensuch companies can gain a higher return on investment. Along with this, for enhancingperformance of business, associations requires to gain attention of loyal customers also. For thisprocess, management should make effective strategies and contribute more efforts in increasingconsumer value through which they can achieve business objectives in a proper manner. Inaddition to this, CLV can be defined as a periodic value which shows the estimated value of 12months relationship that is near about £x. Some major components used by managers of acompany for calculating Customer Lifetime Value are described as follows:Present Value:This factor shows the perception of customers after acquiring services ofa company or footfall of them at outlets (Hollensen, S., 2015). It is like a discounted valuewhich depicts cash flow generated by customers. Along with this, it indicates value of money interms of time i.e. how long a customer will be retain with products.Customer Loyalty: A CLV is totally depends on how long customers will retain withfirm's services and commodities. Therefore, associations always seek to get loyal customer1
Customer's Lifetime Value MANAGEMENT INTRODUCTION 1 TASK 11 P1 Components that enable an enterprise to determine and calculate customer's lifetime value_3
which will help in generating high return on investment. While if people are not not loyal thenthey will not connect with company's products for long time. Mathematical Formula: CLV can be taken as monetary price also which can becalculated by using mathematical formulae. Through mathematical operators, managers canevaluate accurate value. For doing such type of calculation, they need to consider someimportant factors like perception of customers, durability of time in which they retain withproducts or services and total revenue gained by firm. In mathematical terminology it can beshown as (Total revenue/Number of months customer taken the services). This formula derivesthe more accurate result of average revenue generated by a customers at individual basis(Kerzner and Kerzner, 2017).Cohort Analysis: This type of analysis classifies the customers into some group orcommunity having similar characteristics like taste, lifestyles, purchasing power and more.Through this process, managers can understand the demand and needs of people in large way aswell as completed the same within a short period of time. In addition to this, such analysis savestime of completing the demand also.Individualized CLV: In this step, people associated with firm used to measure thedemand and value of customers on individual basis. Since, measuring value of consumersindividually doesn't affect much on profitability but it represents a clear presentation of lifetimevalue of particular person in a company. Calculation of CLV= (Average Order Value) x (No. of Repeat Sales) x (Average of RetentionTime)P2. Benefits of customer lifetime value to an enterpriseBy measuring the Customer Lifetime Value, managers can evaluate performance andimage of an organisation at marketplace. Along with this, they can derive in which positionactually their company is. Through this process, employers can make modifications inorganisational activities and make creative and innovative products in order to get attention ofconsumers towards its services. Furthermore, this type of concept also aid the firm in enhancingthe positive image at marketplace which increase helps in attracting more people. In context withHomebase, this company used to make connection with customers through SMS and e-mailservices (Kim and et. al., 2015). Through this communication process, they provide informationto large number of people about its discounts and various offers. Effectiveness of such strategies2
Customer's Lifetime Value MANAGEMENT INTRODUCTION 1 TASK 11 P1 Components that enable an enterprise to determine and calculate customer's lifetime value_4

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