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Customer Value Management Assignment - (Doc)

   

Added on  2020-10-05

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CUSTOMER VALUEMANAGEMENT

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Components that enable an corporation to determine & calculate customer's lifetime value.....................................................................................................................................................1P2 Benefits of Customer Lifetime Value....................................................................................3P3 Factors that affect customer lifetime value............................................................................4TASK 2............................................................................................................................................6P4 Types of Market Segmentation Strategies applied to customer base....................................6P5 B2C and B2B decision-making models and demonstrate which is used to get opportunities.....................................................................................................................................................7TASK 3............................................................................................................................................8P6 Different techniques and methods an organization can apply to increase customerrelationship..................................................................................................................................8CONCLUSION................................................................................................................................9REFERENCES .............................................................................................................................10

INTRODUCTIONCustomer value management is a business tool which is used to analyse consumer's viewand their demand to provide them effective services in order to maximise profits and growth aswell (Hammer, 2015). This term basically used to maximise consumer's value in individualmanner. This is mainly focusing on designing process of firm that highlights operation andfunction approaches. All these organisational activities affect on productivity as well asprofitability of firm. This report is based on Homebase which is a British home improvementretailer organisation. This firm was founded in the year of 1979 by Sainsbury and GB-Inno-BM.This report is discussed about Various elements to ascertain customer's lifetime value, itsadvantages and Factors that impacts on CVM activities. It also represent Types of marketsegmentation, B2B and B2C decision making models as well as different methods andtechniques to increase customer loyalty and relationship. TASK 1P1 Components that enable an corporation to determine & calculate customer's lifetime valueCustomers are the last buyer of products, so for them an organisation requires to useappropriate tools that helps to build lifetime values for them. In this, employees of organisationalso provide their effective contribution to build positive relation with target customers. Thesekind of organisational activities are used to maximise profit and growth of firm in propermanner. Main motive of Homebase is to increase customer's purchasing power and productssales for desired growth (Hollensen, 2015). Homebase is a broadcasting organisation that providetheir effective services to customers on the basis of SMS and email facilities. Through this, theycan easily spread awareness in customer's mind for their new services. There are differentelements that enable an corporation to determine & calculate customer's lifetime value - Cohort Analysis: This is an effective analysis process in which group of individual's areproviding their own views and preferences toward organisation's diversified business offerings.Main objective behind this analysis is to improve values and qualities of different services forproviding higher satisfaction to target customers. This process takes less times to implementappropriate modification in products on that basis of customer's views and employees opinion.Through this, Homebase can easily understand their customer's requirement and demand for1

appropriate services. These kind of business activities aid to maximise customer's lifetime valuefor getting long term benefits and desired growth easily. Present Value: It is a most important analysis process that is used to identify customer'srole and values in organisational procedure. This process basically determine cost and price ofproducts that is offered by firm in target market. To increase customer's value, Homebaserequires to use effective methods that helps to maximise sales of products. Through this method,Homebase can also address their service users view and opinion toward firm's operationactivities (Kerzner and Kerzner, 2017). These activities and approaches increase periodic valuesto getting higher competitive advantages easily. To maximise customer's lifetime valuesHomebase requires to reduce their products cost to attract maximum consumers toward this. Customer Loyalty: For a business organisation' it is important to build strong relationwith customers to getting long term benefits easily. In this process, Homebase require tounderstand their services users demand and need to serve quality services in front of them.Through this, they can easily create customers loyalty toward their products and services as well.In this process, employees of Homebase also play a most important role to understandconsumer's issues, need, demand and problems. Through this, they provide quality services tothem on the basis of their requirement. These kind of activities helps to provide highersatisfaction to them in appropriate way. Mathematical Formula: This is a statistical representation that is used to analysecustomer relationship value for an organisation in the terms of their satisfaction level andpurchasing power for specific product. It is consider appropriate data of firm's financial gain andlosses. Through this, researcher can easily analyse firm's average income and growth thatgenerated by target customers (Kim and et. al., 2015). These kind of analysis represent loyalty ofconsumer's and their effectiveness toward organisation's products and services as well. This is acreative and impactful approach that requires to consider by Homebase in their operational andfunctional approaches. This method consider specific formula as Total revenue ÷ Number ofmonths since customer joined Some other mathematical representation of this method can be - ◦CLV = ((T x AOV)AGM)ALTHere; T = Average Monthly transactionsAOV = Average Order Value2

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