Customer Value Management - Assignment

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