Customer Value Management Report: Homebase's Strategy

This report analyzes customer value management (CVM) for Homebase, a broadcasting company aiming to increase sales. It covers various components of Customer Lifetime Value (CLV), including present value, mathematical formulas, and customer loyalty, and explains how these elements help determine customer retention and profitability. The report highlights the benefits of CLV, such as improved goodwill, financial growth, and customer retention strategies. It also examines factors influencing CLV, including the availability of professionals, organizational size, and the impact of online and offline channels. Furthermore, the report explores market segmentation strategies like demographic and targeting, and discusses B2C and B2B decision-making models, along with techniques to enhance customer relationships and loyalty. The overall objective is to provide Homebase with actionable insights to optimize customer value and achieve its sales goals.

Customer's Value
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Various components that enable an organisation to determine and calculate a customer's
lifetime value...............................................................................................................................1
P2 Benefits of customers lifetime value to an organization........................................................2
P3 Factors that influence the customers lifetime value...............................................................3
TASK 2............................................................................................................................................5
P4 Types of market segmentation strategies that can be applied to a customers base................5
P5 B2C and B2B decision- making models and how opportunities for customers value
creation can be applied................................................................................................................6
TASK 3............................................................................................................................................8
P6 Different techniques and methods organization can apply to increase customers
relationship and customer loyalty...............................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................12
...................................................................................................................................................12

INTRODUCTION
Customer's value management is an effective activity which helps in increasing client
value in company. Basically the main aim of this is to measure monetary as well as loyalty of
customers within the company. With the help of this, company increases their profitability level
and at the same time, it also influences customers to retain for long time period. For this, it is
manager’s duty to serve quality products and services to customers in order to attain their
satisfaction level (Hammer, 2015). By this, company easily eliminates the chances to shifting
customers to other brand. Mainly, CVM focuses on creating value for customers and attaining
higher profitability level in an appropriate manner. For retaining customers, it is important for
the business organization to understand them. It helps in capturing relevant data and also, in
enhancing customers lifetime value. Present report is based on HomeBase Company which
provides broadcasting services to its customers and wants to increase their sales by 20%. This
report includes various factors which directly affect the customer’s base and retain them for long
period of time. In this company make effective decision making model which helps in attaining
benefits form segmentation tactics. Along with this different techniques as well as model also
used by company to increase customers relationship in appropriate way.
P1 Various components that enable an organisation to determine and calculate a customer's
lifetime value
Homebase is a broadcasting company which provide SMS services to it customers in get
their better satisfaction level. In this company use customers lifetime value tool in order to
forecasting of value to determine the better relation with the customers. Along with this CLV
should be define as a periodic value which stated that estimated a relationship of 12 months and
its value will be £x. By this company easily assess the customers retention rate within the
organization which leads in improving the performance level of the company at market place.
The main aim of using this tool company easily maintain as well as build better relation with
customers which leads in generating ,ore revenue in appropriate way (Hollensen, 2015) . In this
context there are some various components which used by Homebase to determine customers
lifetime are as follows: Present Value: It define as a effective process which shows customers footfall towards
the company products. Basically it is a discounted value which show future cash flow
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which get by the customers. It cover time value of money which leads in retaining the
customers for long time scale. Basically CLV include periodic value. Mathematical formula: Under this, professional considered CLV as a monetary price
which calculate by using mathematical formula which helps in providing accurate value.
It include a formula which is Total revenue ÷ number of months since customers joined.
It define that average revenue which generate by customers (Kerzner and Kerzner,
2017). Along with this, company generate revenue by its customers to improve their
profitability level. It is more useful component which determination of CLV in order to
retain their customers for long time period. Customers Loyalty: Basically customers lifetime value depend on customers loyalty.
With the help of this company easily determine period of customers retaining. In case, if
customer is loyal than they connect with customers for long time period. It will increase
customers value within the company. On the other side, if customers are not happy as
well as loyal with company which reduce profitability level of the company. Individualized CLV: If company calculated broadly than company does not get
profitable. On the other side if company calculate as per individual which define clear
presentation towards the customers value. It is associated with customers lifetime value.
 Cohort Analysis: Cohort can be said as a group of people in which person shares same
features and characteristics. It take less time which analyse of individual user. It define
various variations that directly affect the customers lifetime value in order to attain better
relation of them (Kim and et. al., 2015).
All these components are helps in increasing customers base within the organization
which leads in increasing overall profitability of the company.
P2 Benefits of customers lifetime value to an organization
Now day's CLV get increased and gained so much attention form various corporations. It
is more important for business organization to increase their profitability level by increasing
customers base. Along with this, customers value helps in building goodwill of the company at
market place by delivering quality products and services in effective manner. With the help of
this company get competitive advantage in appropriate way. In this context there are some
benefits of customers lifetime values are as follows:
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 Build effective goodwill in market: It is an effective which helps in improving goodwill
of the company at market place. In this customers play important role in increasing
profitability of the company so that firm should provide quality services to them. By this
company easily attain higher growth at market place. Get higher benefits and growth easily: Under this, technologies play important role in
defining innovative ideas to produce products. In context of Homebase Embarked have to
offer quality services by using effective services. For this they also do online marketing
in which they deliver their innovative ideas. The main advantage of this that company
easily expand their business in new areas (Kotler, 2015). Financial growth: Under this, capital needs,business transaction are considered.
Basically it define brief information of their investment and manufacture process in
effective manner which leads in improving customers base within the company. Along
with this, CLV helps in building financial growth at market place.
 Retention/Win Back of customers: It stated that customers are last consumer of the
products which help company to improve positive brand image and also attain higher
profitability of the company at market place. Along with this, individual make long time
value which aid in getting competitive advantage in order to increase their position at
market.
Homebase company use customers lifetime value to evaluate future opportunities which
leads in maintaining better relation with customers. In current scenario, it is useful technique
which helps in providing adequate data of the customers. With the help of this company improve
their operational activities and also retain their customers for long time period (Kotler, 2017).
P3 Factors that influence the customers lifetime value
CLV is not affected by particular factor but it is influences by various elements and its
calculations and sometimes it leads to negative results. In simple word the term CLV means
calculation of customer life with company and what price he or she given after serving in that
organisation. Homebase is one the famous technique which used to enhance customer base in
order to generate higher profits. Systematic evaluation of these factors decrease the effect on
calculation of CLV. Following are the factors stated below:- Lack of Professionals: Under this it has been concluded that expertise who are
specialised in this field are not available for the accurate calculations of customer lifetime
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value (Kumar and Reinartz, 2016). Therefore due to non-availability of professional lead
to inaccurate calculation and company suffer from huge loss due to poor decision making
and worst working quality. Low involvement in product categories: Poor calculation of CLV lead to worst quality
standards in relation to goods and services provided to customers. Therefore company
loose all the customer base and it is difficult for them to remain sustain in external
market. In dynamic business environment branded companies come with distinct product
having different variants which also make difficult for those organisation having lack of
specialised expert staff. Difficult to calculate: Calculation of CLV is possible only with presence of experts in
that sectors. Absence of this expertise make this task complicated. Lots of factors which
include all the internal and external drivers have both positive and negative impacts on
company working style. CLV calculations become impossible because of random
alterations in external environment. Nature of organization: In recent scenario due to advanced technology approaches of
CLV is increased now a days. Therefore, lack of coherent management is the another
important element that increase the use of this mechanism by improving the ability and
skills of approaches used by manager of company. Online and offline channels: Now a days there are various modern technique of CLV
available that help in preparing the whole workforce more efficient and viable for future
perspectives. The main objective behind it is to formulate stable strategies which enable
company in rational decision making (Pearson, 2016). Availability of online offline
channel make simple for organisation to calculate CLV in adequate manner which help
organisation is facing all the challenges from external competitors and leads to proper
accomplishment of resources.
 Size of organization: Company working on large scale enjoy large customer base but
these association are unable to calculate CLV for individuals customers so there is a need
to adopt broad concept but their accuracy is low. While on the other hand company work
on small scale analyse CLV as per client list.
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TASK 2
P4 Types of market segmentation strategies that can be applied to a customers base
Market segmentation is an effective process of dividing a market and its customers into
various groups and another characteristics. Basically, it is an appropriate which create target
customers and provide them accordingly. By this company easily enhance their profitability level
and also retain loyal customers for long time period. In this, it is manager duty to pay attention to
those type of customers who consume company products for their satisfaction. It helps in
increasing profitability of the company (Rihova and et. al., 2015).
Further, market segmentation is a group of individuals which is set by manager of
Homebase company to improve their performance level. In this manager should segment their
market in those sectors in which they easily generate more profitability. In this there are some
type of market segmentation which dived by company to improve their efficiency in appropriate
manner are as follows: Segmentation: It is an effective strategy which is used by Homebase company to find out
customers behaviour with different needs. By this company easily offer them services
and get their better satisfaction. It aid in retaining customers for long time period. Apart
from this, it is also necessary for selected firm to pay attention on segments to make their
performance positive and also increase customers base within the company. In this
customers have different characteristics, behaviours and needs towards the products and
services. Targeting: It is an necessary part of marketing, in which organization select one or more
of segments. In this company identify the most attractive segments to increase their
profitability level in market.
 Positioning: It is a last step in which company define oriented stage where company
assess their competitive advantage. It also define their position in customers minds which
leads in influencing customers to buy its products and services.
Along with this there are some elaboration of all those segmentation are as follows: Demographic: It define specific segment which based on age, gender, standard, norms,
believes of the customers. With the help of this company easily gather proper knowledge
of the population. All these play important role in front of products and services. Along
with this company offer their services to its customers in order to get better satisfaction
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by them. In this company serve their products information through SMS services. By this
they easily provide their information to its customers (Schwepker and Schultz, 2015). Geographic: In this manager of the company use effective tools as per customers areas
where they live. It include state, country and many more. In context of Homebase,
manager set their market segment in which they sell their SMS package to college going
students. With the help of this segment company get higher advantage by evaluating their
product types and services. Psycho graphic: It define customers segmentation as per their interests, hobbies and
lifestyles. Basically it include those market where quality and brand is more important as
compare to price. So that company include those people who are not conservative for the
cost of the products. In this they focus on their luxurious life. Hence it includes social
status, personality, attitude, values. Behavioural: It is an effective as well as new concept in digital age and considered those
parts in which firm has gather by customers data reports, trends. It also define use pattern,
sensitivity price, brand loyalty and benefits (Stark, 2015).
 Combination strategy: It is more effective which combination of all above strategies to
make an effective as well as best plan for market segmentation in appropriate way.
P5 B2C and B2B decision- making models and how opportunities for customers value creation
can be applied
Decision making process highly depends on business types in which they take decision in
appropriate way. B2C and B2B are consider in business type in which decision are totally
depend on its activities. In context of Homebase, they make an effective decision making process
in order to enhance their overall efficiency in appropriate way. In this context there are some
type of decision making model which is used in business to customers and business to business.
All these are understood by some points are as follows:
Decision-making models B2C B2B
Rational/ Classical model  It is an effective model
in decision making. In
this business to
consumers is one of the
 It is a new format
which helps in
conducting business
operation. It does not
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oldest business in it
uses rational model to
take decision as well as
judgement.
 It define clear issues.
 Basically it is best for
small business
organization in which
all the objectives are
clearly mentioned.
considered decision
making model of
components.
 In this section complex
issues are considered.
 It is best for large
business organization
in which aims of the
company does not
mentioned.
Administration or Bounded
Rationality Model
 In this factor decision
making model include
attainment target which
helps in improving
performance.
 In this decision maker
include alternatives in
order to take better
judgement.
 B2C can be define as a
smallest company in
which they include
alternatives which is
less so that manager
easily assess it
effectively and attain
positive results. By this
decision maker easily
make an effective
decision in order to
improve performance
 It is also an effective
technique which is
used by top
management to getting
desirable goals and
objectives.
 In this business to
business cover wide
area in this various
options define in
market in order to take
right decision.
 Along with this
manager has various
options which is more
complex for manager
to assess the
alternatives.
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level.
Retrospective Decision
making Model
 In this segment
company manufacture
value goods and
products and introduce
in market place to
make purchasing easy.
 In this workers of the
company directly
connect with large
scale of business
organization. By this
they easily improve
their performance level
and also take best
decision.
TASK 3
P6 Different techniques and methods organization can apply to increase customers relationship
and customer loyalty
HomeBase is a broadcasting company which deals in the service sector in which they
provide quality services to customers in order to form customer base in an appropriate manner.
Basically, they offer SMS facilities which improve their market share and also, attain
competitive advantage. By this, company easily improve their profitability level at market place.
It is vital for the entity to make a strong customer base in order to prepare a successful plan. For
achieving the competitive success, it is more important for business organization to create strong
customer base which leads in enhancing the profitability level of firm (Weinstein and Pohlman,
2015). Along with this, customer loyalty is an important component for company to attain
competitive advantage in cut throat competition. In this, loyal customers play an important role
in generating revenue for the business organization. In context of HomeBase, manager offers as
well as provides quality products and services to customers in order to gain their loyalty in an
systematic manner. With the help of this, they make a strong customer base which leads to attain
higher success in market place.
In this, various tools and techniques are used by the manager of company to improve
their relationship with customers. Basically, loyal customers are considered as an asset of
company because they are original buyers with buying capacity. In this context, there are some
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methodologies which are used by the business organization to increase loyalty customers which
are as follows:
 E-mails: It is an effective and important technique for business organization in which
company easily improves their relation with customers. With the help of this, company
establishes a strong connection with customers. In this, company sends as well as
receives emails to contact with clients. Basically, it is an electronic mail facility which
provides instant delivery by the internet to other party. Along with this, customers also
send message of their feedback regarding the company and they attend their support in
specific time scale. This process takes short time in which both parties employer and
stakeholders establish strong bond among them. In case customers get revert from
company then he/she feel that they are important for company which leads in increasing
satisfaction level of the customers in an appropriate manner. Hence this process as well
as methods aid in increasing customers base and also enhance their loyalty towards the
company and its services (Xu, Peak and Prybutok, 2015).
 SMS: It is also an effective facility in which an individual sent text message to another
party. Basically, it is a little slow as compare to e-mailing. Along with this its in more
effective and simple technique which can use anyone and it does not need to use internet
to make connection. It has a wide area in which number of people make strong
relationship. It also helps in providing number of individuals. By this customers can send
their positive and negative message as well as thoughts to company and manager will
take it and also tries to make them fell more important. In assistance of this manager of
company also get motivated and secure their position within the company.
 Telephone: It is an effective which covers dual party conversation. In this, only two
persons get connected at the same time. Basically, this method is used by those persons
who want to resolve their issues and problems quickly. Thus, by this, they get immediate
answer from them and resolve their problems in an effective manner. Along with this, it
is a wide network in which customers easily communicate with the manager of company
and resolve their issues effectively in short period of time.
 Internet: Current world is wide networking global in which number of people use social
networking sites to connect with each other. In this company also use this type of method
to establish connection with numerous people. With the help of this, company gain
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customer’s attention. Along with this, firm also promotes their operational activities on
internet by making websites. In this, company easily provides information to their
customers about products and services they are offering. Mainly, this type of method is
one of the important techniques for business to increase customers numbers in order to
enhance their profitability level (Tools of customer relationship management, 2017).
All these are effective and important technologies which result in improving the overall
performance level of company by increasing customer base. With the help of this, HomeBase
increases their profitability level and also, captures a large market share from its rivals.
Along with this, there is an another point name as “Internet of things” which company
uses to represent data that is collected through calculation of customers lifetime value. With the
help of this awareness can be created, data can spread to attract as well as invite more customers.
CONCLUSION
As per discussed assignment, it can be summarised that customers are most important
part for every type of business organization in which leads in increasing profitability level of the
company. Along with this it is also important for business organization to provide them quality
services to its customers in order to keep them for long time period. Furthermore, company also
adopt segmentations to increase number of customers by providing them variety services to
enhance their profitability level. In this manager have to find effective reason to ensure that their
customers does not shift to another brands. With the help of this they enhance their customers
base and improve their profitability level as well. For this manager make decision making
process which is beneficial for B2B and B2C. Thus management of company have to effectively
evaluate their performance level to keep their clients for long time period by offering quality
services to them.
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