Customer Lifetime Value and Brand Value

The assignment discusses the importance of customer lifetime value in enhancing brand value and profit generation. It outlines different elements that contribute to calculating customer lifetime value, including customer retention, quality of products or services, and division models in B2C and B2B. The report also describes various methods and techniques to increase customer relationship and loyalty.

Customer value management

Table of Contents
INTRODUCTION .........................................................................................................................3
LO1.................................................................................................................................................3
P1. Various elements assisting an organisation in calculating customer's lifetime value..........3
P2 Benefits of customer lifetime value .....................................................................................4
P3 Various factors affecting customer lifetime value................................................................5
LO2.................................................................................................................................................6
P4 Different sorts of the market division strategies...................................................................6
P5 Decision making model for B2C and B2B...........................................................................7
LO3.................................................................................................................................................8
P6 Various methods and techniques to increase customer relationship and loyalty..................8
CONCLUSION ..............................................................................................................................9
REFERENCES ............................................................................................................................10

INTRODUCTION
Customers are the most important part of an organisation, plays a critical role in the
sustainability and success of the business or company. The companies have to make sure the
needs and requirement of the customers are fulfilled through effective management in order to
gain sustainability and increase the revenue generation. This report is in context to Home base,
UK organization. The report will identify the various factors that assist the organisation to
understand the importance and benefits of the lifetime customer value. The various factors
affecting the lifetime value of the company, different market segments will be considered in this
report along with the various kinds of business model which focuses on the techniques for
increasing costumer loyalty and relationship.
LO1
P1. Various elements assisting an organisation in calculating customer's lifetime value
Customers are the key players in the formation of value in a company. The fulfilled and
faithful customer base will help the organization to pick up a superior profit and encourages it to
meet the focused on objectives. In this way, to keep up and maintain the customer is
exceptionally essential for an organization. The customer lifetime esteem is a standard that
encourages the organization to gauge its net benefit from a specific individual customer. It
encourages the organization to decide the surviving of the significance of a customer in regard
to the connection of the customer with the organization. It causes the organization to distinguish
its fiscal assets and make an arrangement on its proficient spending of the cash(Nagaoka and
et.al, 2016). The customer's Lifetime esteem or CLV is computed by expelling the cost of the
giving a support of a customer from the benefit picked up from an individual customer of the
organization. It incorporates the measure of the use that is been made on a customer in
correlation of the income or advantage picked up from him on seven days, month or yearly
premise. A few times it picks up a superior efficiency by the organization. In the greater part of
cases it drives the organization to stay away from the territories on the publicizing procedure
which may unfavorably influence the over all execution of the organization. It encourages the
organization to recognize and embrace the reasonable measures to fulfill its old and new
customers.
Different methods to calculate the CLV for an organization are as follows -

1. Normal income per customer: This encourages the organization to decide the normal
income of the customer every month and after that increase the incentive with 12 or 24
to get yearly or semiannual CLV of Homebase.
2. Help in examination: It incorporates the different elements of the progressions that
happens in the organization with the course of time. It encourages the organization to
recognize the adjustments in the customers prerequisites with the progression of time. It
is profoundly in light of the components like market changes, regularity and customer's
inclinations.
3. Individualized CLV: It encourages the organization to recognize the aggregate esteem
made by an individual customer through different channels, battles or different mediums,
for example, coupons and so forth. This may likewise incorporate the web-based social
networking and advanced showcasing which encourages the organization to distinguish
the assets productively(Goetsch and Davis,2014).
This measures help in the better administration of the diverse tasks that assist in the change of
the proficiency and increase consumer loyalty level that assist in the increasing Customer
lifetime value for Home base, Uk effectively.
Concept of the customer lifetime value
The Customer lifetime value approach assist an organisation such as Home base to
obtain a better idea with respect to the needs and demand of the customers in order to effectively
fulfill them. The customers value is very important for both B2B or B2C company, with regards
to the B2B companies two or more business collaborate with each other to provide more
effective product and service to the customers with respect to their demand and needs. On the
other hand within B2C sector the business directly identify the needs and demand of the
customers to increase the customer lifetime value. The organizations provide effective services,
offers and discounts to increase the value of the customers(Hsiao, Lee and Chen,2015).
P2 Benefits of customer lifetime value
The Customer lifetime value theory or approach is deeply affecting the organizations
such as the Home base. There are various benefits of customer lifetime value approach as
described below –
1. Customer segmentation – The Customer lifetime value (CLV) procedure assist the
organizations such s Home base to classify various customers. It also helps the

organisation to determine its potential and permanent customers which helps in
increasing customer satisfaction.
2. Business assets – The CLV approach helps the organizations like Home base to develop
an actual idea about the assets owned by the company in a detailed and effective way.
3. Management of complaints – CLV also helps the organisation to identify and resolve any
kind of issue or problem faced by the customers or the company. This helps an
organization to develop appropriate strategies and plans for eliminating any problem or
error in the business activities(Martinsuo and Killen,2014).
4. Increasing Return of investment – The procedure of customer lifetime value assist the
organization to use most effective techniques for meeting the demands and need of the
customers. This helps Home base to increase the market share and assist the company to
fulfill the customer's demand and obtain revenue through the utilization of various
resources.
5. Customer sustainability – Customer lifetime value system, helps an organisation to
sustain its customers by building customer loyalty. The customer gets attached to the
organisation as it fulfill the demand and needs of the customers.
P3 Various factors affecting customer lifetime value
The Customers's lifetime value is deeply influenced by the different kind of components that
will lay an immediate or backhanded effect on the handling of the CLV in an association like
Home base. These components impact the CLV as well as leads the organization to address the
issues and requests of the customers to pick up a superior administration from the organization.
Other than this, the other hierarchical factors too lays a profound and critical impact on the
activities of the organization. Some central point that influence the tasks of the organization and
its CLV are as per the following:
 Purchasing decision: The buying limit of the buyer lays a profound and noteworthy
impact on the activities of the organization. The shopper will just buy the great or the
administration from an organization when he is altogether fulfilled. This will lead the
organization to give better administrations to the customers and meet their necessities in
an exceptionally critical way. Other than this, this encourages the organization to

recognize the reasonable obtaining energy of the customers(Xu, Peak and
Prybutok,2015).
 Customer Loyalty: The customer reliability is additionally an exceptionally imperative
component that is required to be taken into information by the organization. The
steadfast customer will bolster organization to pick up a superior efficiency and meet
prerequisites of organization. Customer loyalty will encourage the company to have a
successful share of the market and create an appropriate measure of income to complete
the activities and have better CLV.
 Company services The administrations or the items that are been delivered by the
organization will significantly affect activities of the organization that will enable the
business to firm to pick up a superior consumer loyalty level. The fulfilled customer will
prompt buy more merchandise and enterprises from organization which will bolster
organization to build its benefit to make a superior customer's lifetime esteem
Other than this, the different factors, for example, constructing a superior customer relationship,
mark steadfastness, up offering or strategically pitching of merchandise or administrations,
better rebates and rewards to the dependable customers and giving a superior after
administration likewise helps in enhancing the CLV for the Home base.
LO2
P4 Different sorts of the market division strategies.
The customer base or the market of the business association is profoundly subject to the
activities of the organization and causes the organization to address the issues and requests of its
customers by building up the items or the administrations in like manner. The division of the
market underpins organization to meet the prerequisites of the customer's in an exceptionally
critical manner. This causes the organization to build up a superior targets and meet the
necessities of the organization by utilizing certain market division procedures which are as per
the following:
1. Geographic division: This incorporates the act of building up the market based on the
topographical area. This enables the organization to provide food the customers of
different territory or area and plan the systems as needs be. As the general population of
different area will have distinctive sorts of the taste or necessities. In this manner, the

organization needs to take reasonable measures to cook the prerequisites of the
customers(Ramaswami and Arunachalam,2016).
2. Statistic division: In this, the customers are been divided based on the different variables
like conjugal status, race, religion, occupation, nation and so forth this causes the
organization to design the better administrations or the items agreeing the customers.
Other than this, it will help the organization to attract different sorts of buyers.
3. Behavioral division: This is construct to a great extent in light of the conduct or the
demeanor of the customer towards the organization or the administration. This causes the
organization to expand its comprehension of the learning of the organization for its
products or services and their viable utilization.
P5 Decision making model for B2C and B2B
Decision making models are different in B2B and B2C industry, The B2B organizations
focus on the making effective decisions by involving each and every area or department of the
company whereas B2C organizations mainly includes the marketing and sales departments in
the decision making process with regards to the customer lifetime value. The decision making
process within the B2B industry lies for a long period such as a year or two whereas the B2C
decisions are made within small period such as a month or two(Rihova and et.al. 2015).
Different division models in B2C and B2B to produce key knowledge and advertising insight
for customer esteem creation
It is imperative for organizations like Home base to fragment their customers as it gives
advertisers to get precise photo of their administration customers. There are models for B2C
zones and they are as per the following:
1. Division in view of need: There are numerous organizations around the globe that
convey their customers with comparable arrangement of items and administrations.
Firms that can comprehend the prerequisites in viable way can accomplish their
objectives and goals. For this reason, business needs to lead time to time statistical
surveying with the goal that necessities and prerequisites can be distinguished. Further,
customer's esteem is made, at that point legitimate look after their inclinations and the
issues that are looked by them are considered. Then again, for B2B divisions are made in
connection necessity of customers.

Further, for division model of B2B are additionally imperative for recognizing people as their
customers. Below given is the model:
2. Needs: This is a kind of plan that empowers to classify benefit customers in view of
needs, wanted results or comparable needs. This is very successful for customers like
encouraging low exertion co-operations or decreasing protestations. Customers can
create positive discernment inside their mind when every one of the issues that are
looked by them are considered. So also, for B2C needs are centered with the goal that
open doors that win in the market can be recognized.
LO3
P6 Various methods and techniques to increase customer relationship and loyalty
There are many methods which can be used by an organization to enhance and improve
the customer lifetime value, these methods can be described as below -
 Skilled employees – It is very important that the employees or workers of the
company are highly skilled in order to increase the efficiency of the organisation
or company. The employees should be aware of their roles and responsibilities so
that they can perform in a better way.
 Measuring satisfaction level of the customers. - The company can focus on
measuring the level of customer satisfaction, it can help the companies to identify
the needs and demand of the customers and meet them which assist in increasing
customer loyalty and relationship(Kerzner and Kerzner,2017).
 High quality of product or services – The organization can improve the quality of
the products and services they offer to their customers. High quality products and
services attract existing as well as new customers which helps in building
customer relationship and improve customer loyalty.
 Customer retention – The company should focus on collecting the feedback and
reviews of their customers in order to identify the issues or limitations of the
organisation it helps in holding the existing customers as well building a good
brand image.
The above techniques or methods helped Home base, UK to improve its brand value and
image in the market as well as attracting more customers. The company can improve the

customer lifetime value with the help of the various methods to increase the customer loyalty
and relationship. The above methods help in increasing customer satisfaction which helps in
developing good customer relationship.
CONCLUSION
The above report concluded that customer's lifetime value is an essential factor that help
the organizations such Home base to increase their brand value and profit generation. The report
determined the various elements assisting an organisation in calculating customer's lifetime
value along with the different factors affecting it. Furthermore, the assignment also described
different division models in B2C and B2B to produce key knowledge and advertising insight for
customer esteem creation and various methods and techniques to increase customer relationship
and loyalty.

REFERENCES
Books and Journals
Nagaoka, H., Nakamura, T., Nakagawa, T. and Kaneda, M., 2016. Development of Methods for
Visualizing Customer Value in Terms of People and Management. Hitachi
Review,65(2), p.841.
Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence. Upper
Saddle River, NJ: pearson.
Kerzner, H. and Kerzner, H.R., 2017. Project management: a systems approach to planning,
scheduling, and controlling. John Wiley & Sons.
Rihova, I., Buhalis, D., Moital, M. and Gouthro, M.B., 2015. Conceptualising customer‐to‐
customer value co‐creation in tourism. International Journal of Tourism Research, 17(4),
pp.356-363.
Ramaswami, S.N. and Arunachalam, S., 2016. Divided attitudinal loyalty and customer value:
role of dealers in an indirect channel. Journal of the Academy of Marketing
Science, 44(6), pp.770-790.
Martinsuo, M. and Killen, C.P., 2014. Value management in project portfolios: Identifying and
assessing strategic value.Project Management Journal, 45(5), pp.56-70.
Xu, C., Peak, D. and Prybutok, V., 2015. A customer value, satisfaction, and loyalty perspective
of mobile application recommendations. Decision Support Systems, 79, pp.171-183.
Hsiao, C., Lee, Y.H. and Chen, W.J., 2015. The effect of servant leadership on customer value
co-creation: A cross-level analysis of key mediating roles. Tourism Management,49,
pp.45-57.