Customer Value Management Concept

Added on - Nov 2020

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CUSTOMER VALUEMANAGEMENT1
Table of ContentsINTRODUCTION...........................................................................................................................3LO.1 Concept of customer lifetime value and the factors affecting it:............................................31.1 Various components of customer lifetime value...................................................................31.2 Justify the benefits of customer lifetime value......................................................................41.3 Evaluate the factors influencing customer lifetime value:.....................................................41.4 Concept of customer lifetime value, It uses in combing customer data in relation to B2Band B2C.......................................................................................................................................5LO.2.Different segments in customer base:.....................................................................................62.1 Types of market segmentation strategies...............................................................................62.2 Evaluate B2B and B2C models..............................................................................................7P6) Analyse the different techniques and method in order to increase customer lifetime value82) Evaluate the appropriateness techniques and method applied at different stages of theconsumer decision-making process and CLV..............................................................................93) concepts of customer lifetime value management in an organisation context.....................10CONCLUSION.............................................................................................................................10REFERENCES..............................................................................................................................112
INTRODUCTIONCustomer value management is very important for measuring company consumer view ofthe sensed value for wealth delivered relative to that of their competitors client. According to thisfile managing the value of customer's interaction(Kotler, 2017). This report his very helpful forunderstanding the consumer lifetime value. It also defining various types of factor which isinfluences the clients. This report is also providing the different type of market segments incustomer base and their opportunities for value creation. It also includes the role ofsegmentation, targeting , it is useful for identifying the lifetime value opportunities.LO.1 Concept of customer lifetime value and the factors affecting it:1.1Various components of customer lifetime valueCustomer are the key success to every organisation, the organisation cannot work withoutthere customer. The various components that enable the company to calculate it CLV are:Customer Contribution Margin:This refers to the customer contribution in theprofitability of the organisation. This is determined by the customer contributing to thepurchase of the product. It constitute of both the customer variable cost and the customerrevenue.Retention rate for the customer:This should always be high. The company tries tomaintain maximum number of customers to the organisation. It takes necessary actionand plans to reduce the customer from getting resented. Therefore, Homebase hasintroduced the concept of E-mail and SMS to lure and maintain it customers (Kahreh andet. al, 2014).Discount rate:This refers to the amount the business should invest on it marketingoperations to get maximum profits in the near future. The discount rate shows the valueof future cash flow of today money. The company has taken up the promotional eventsproviding discounts both through message and on stores.Customer Acquisition Cost:This is calculated to know how much the company has spent3
on it marketing techniques in order to attract more customers to buy the products.Example; the Homebase has introduced the technique of SMS and E-mail which hasboosted up more response and purchase from customer.1.2 Justify the benefits of customer lifetime valueEnables Marketing:Customer lifetime value enables the company to focus and preparethe marketing techniques according to it targeted market, this helps the company to saveit time and money in long run.Helps in segmentation:This helps the company to segment it customer marketaccordingly, the company is able to identify different groups and then revised and make itmarketing strategies for those groups. The company makes proper segments so to ensurethe proper targeting and positioning of the product (Bejou and et. al, 2013).Builds up Brand Loyalty:The most important thing is the brand loyalty a companyhaving good brand loyalty, then it will become easy for the company to win over therecompetitors, and reduces the customer switch cost to other brands. This can only bepossible by having a better Customer Lifetime Value (Zeynep, Ata and Toker, 2012)Increases Sales:The better the CLV the more it will attract the customer and increasesthe companies sales. Having trusted customers, the company can directly make a call orpromote there products through SMS and E-mail system to make customer pursue to buyyour product.Utilisation of resources:It helps the company to allocate and utilise it limited resourcesin more effective manner.Return on investment:The Customer lifetime value helps the company to know that howmuch a company should invest on it customer retention in order to get the maximumvalue out of it.Time saver:Company is focused on it marketing strategies and know how much timeshould be spend on it. This enables Homebase to modified it marketing techniques.(Ekinci and et. al., 2014)1.3 Evaluate the factors influencing customer lifetime value:There are factors responsible for influencing and affecting any companies' customerlifetime value they are:4
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