Customer Value Management Report: Homebase, Customer Lifetime Value

This report provides a comprehensive analysis of Customer Value Management (CVM), specifically focusing on the home improvement retailer and garden center, Homebase. The report delves into the concept of Customer Lifetime Value (CLV), examining its components, such as present value, mathematical formulas, customer loyalty, individualized CLV, and cohort analysis, and how they enable an organization to understand and demonstrate CLV. It also explores the benefits of CLV for Homebase, including managing goodwill, supporting scalability, enhancing profit, and aiding in customer retention. Furthermore, the report identifies factors influencing CLV, such as professionalism and resource utilization. It then examines market segmentation strategies applicable to Homebase's customer base, including demographic, geographic, psychographic, behavioral, and mixed approaches. Finally, the report evaluates B2B and B2C decision-making models, highlighting opportunities for customer value creation and techniques to increase customer relationships and loyalty.

Customer Value Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analyse various components that enable an organisation to demonstrate about customer
lifetime value...............................................................................................................................1
P2 Benefits to customer lifetime value to an organisation..........................................................2
P3 Factors that influence the customer lifetime value................................................................3
TASK 2 ...........................................................................................................................................4
P4 Determine the types of market segmentation strategies that can be applied to customer base
.....................................................................................................................................................4
P5 Evaluate B2B and B2C decision making models with opportunities for customer value
creation........................................................................................................................................6
TASK 3............................................................................................................................................7
P6 Different techniques and models organisation can apply to increase customer relationship
and customer loyalty...................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES ...............................................................................................................................9

INTRODUCTION
Customers are the ultimate one whom used to support and enhance an organisation
goodwill. Thus, a firm need to value their users aspects properly so that better and signified
outcome could be drawn (Hammer, 2015). Customer value management is a process where a
business should focus on working so that they become able to manage values and attribute of
their signified users. This project is based on Homebase whom engage in working over on
improving home retailer and garden centre. In this project certain number of things will get
included which define about customer lifetime value with its calculation with factors which
influence it. Along with this, it will also going to define about various segments in customer
base. Further it will also signify about techniques and methods to enhance customer lifetime
value.
TASK 1
P1 Analyse various components that enable an organisation to demonstrate about customer
lifetime value
Customer lifetime value is define as prediction of net profit attributed to entire future
relationship with users (Hollensen, 2015). A business need to assess and understand about
various components of CLM so that better and effective working could be done. There is a need
to understand about customer lifetime value properly so that better and effective working and
profitability could be maintain and manage. Homebase is one of a major home enhancing retailer
and garden centre with appropriate components which enable an organisation to demonstrate
about CLV: Present value: One of a major thing which need to understand by Homebase is present
value of their customers. Here, they need to understand the attribute of their clients so
that better and effective working could be done which facilitate beneficial outcome in
nature. Mathematical formula: Homebase experts define customer lifetime value as a monetary
price which got estimated by consulting a mathematical formula. This get estimated by a
company by dividing total revenue with number of customer joined an organisation. This
enable in defining and analysing things better and in appropriate frame as well. Customer’s loyalty: Customer lifetime value could be maintain and manage through
customer loyalty which could be estimated through providing appropriate discount and
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vouchers. Homebase could gain better customer loyalty with repeat visit so that better
lifetime value could be created. Individualized CLV: Business have to determine certain number of things in better and
signified manner (Kerzner and Kerzner, 2017). For a company it is really essential to
organise and determine lifetime value on individual frame not on broad basis. This
individualise customer lifetime value enable and support Homebase to analyse each and
every person more properly so that they could maintain CLV in a better and signified
frame of reference.
 Cohort analysis: Cohort indicates a group of individuals who share same characteristics.
This indicates various situations that affect CLV to create and maintain healthy relations
with customers. Homebase need to identify all such individuals and customers which
have similar cohort so that they could maintain and manage their better and signified
working which further enable in accomplishing targets.
Such components enable Homebase to evaluate customer lifetime value which support in
managing things better and in proper frame so that effective and efficient outcome for a business
could be drawn.
P2 Benefits to customer lifetime value to an organisation
Customer lifetime value enable and support a business to grow and expand themselves.
This enable them in attempting more profit so that better and supportive outcome could be drawn
(Kim and et. al., 2015). Thus, for a business it is really essential to understand about customer
lifetime value to Homebase so that better and effective outcome could be drawn. Below are
certain merit for CLV for Homebase which need to understand by managers so that effectiveness
and efficiency could be maintain: Support in managing goodwill: Customer lifetime value enable and support in managing
goodwill of a company. A business could gain benefit and sustain in an environment by
providing better products at keen competitive world. Although, lifetime value also
facilitate a good relationship with users so that chances of deriving effective and suitable
outcome could become possible. Homebase could gain and enhance their goodwill only
when they provide and deliver right quality products. Thus, for managing goodwill for a
company it is really essential to craft a better and signified thing in a define manner.
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 Support in scalability: Customer lifetime value also enables in scaling the operations at
multiple frame. Business need to understand the stances in better and effective manner
where if values could be maintain and manage in better frame then it will craft a
profitability for an association. Homebase could expand themselves properly when they
start respecting about users which further provide benefits in scaling up operations. Support in enhancing profit: A business ultimately want higher profit and consideration
in return (Kotler, 2015). A profit could be gain through satisfying customer and their
loyalty as well. A business need to understand such thing and required to maintain their
customer lifetime value so that business could be maintain and manage better as well as
enhancement of profit could be done. This will get understand by managing relationship
with clients and define as ultimate benefit through CLVM.
 Enable in retain customer: A customer lifetime value provide benefit in terms of
retaining customer and users. It is really essential for a business to retain their users by
providing appropriate discount and vouchers so that better effectiveness and efficiency
could be maintain and manage. Homebase need to understand this benefit provided by
CLVM so that they could retain maximum individuals by providing effective and better
services.
P3 Factors that influence the customer lifetime value
A business could be operated in two context where one stands for business to business
and another one is business to consumers (Kotler, 2017). It is really essential to understand such
attribute by managers of an organisation so that chances of influences could be minimise. Like in
business to business, products need to be more creative in frame otherwise it used to restrict a
firm to again deal with such organisation. Homebase are one of a major retail shop whom have
suppliers in differ parts of the world. Thus, if suppliers will not going to deliver quality products
then it impacted on Homebase profitability as thus their value of lifetime get influence and thus
shift used to take place.
Similar thing used to take place in business to consumer segment. Here, consumers are
define and determine as ultimate god and management need to focus on all needs and wants of
them. One of a major factor which used to influence customer lifetime value is lack of
inappropriate products and services which not used to design as per the needs and wants of their
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clients. Although, their experience become in appropriate which further restrict them to purchase
similar company products.
With such aspects, certain more number of factors get evaluated which used to influence
customer lifetime value of Homebase. This need to assess and understand better so that they
could used to deal out proper with better overcoming: Professionalism: One of a major thing which need to assess and understand by
Homebase while producing goods and services is related with lack of professionalism. If
a company do not have appropriate number of professional then they used to face heavy
crises which is not appropriate for them and their working as well as customer lifetime
value also get impacted (Kumar and Reinartz, 2016).
 Low utilisation of resources: Another factor which influence customer lifetime value is
not utilising and supporting resources properly. If a company have sufficient number of
resources and money and they do not used to invest it in their production of goods and
services then chances of negative influence tend to rise. This have to understand by
Homebase properly so that such factor influences could be controlled properly.
TASK 2
P4 Determine the types of market segmentation strategies that can be applied to customer base
Market division is the method of separation the market and clients into bunches on
premise of their qualities, age, premium, pay level and some more. This assistance firm in select
a portion and offer them items to fulfil their necessities (Pearson, 2016). This expansion number
of organization's benefits as well as in the meantime help firm in hold clients for long day and
age. Further, under this, director examine and recognize the people who pay for organization
items and buy it for satisfy their prerequisites.
This procedure is do b administrator to upgrade benefits of organization. Portion with
high capability of development ought to be pick by administrator. With this firm can create vast
number of benefits. As a matter of fact procedure of portion the market and offer them items to
create benefits incorporate three stages which are as per the following: Division: This is the initial phase in which firm distinguish and look at the conduct and
needs of clients. This demonstrate firm the administrations offered by it to better fulfil
their requirements and help in hold them for quite a while period. Before pick a section it
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is essential for Homebase to decide the execution and development capability of
fragment. Focusing: Under this, firm select at least one than one fragment to offer its
administrations. Firm distinguish the most appealing section to produce more number of
benefits.
 Situating: In this, last at long last offer its items and administrations to its clients for
fulfill the necessities of its clients and to get a situation as a top priority of its clients.
Procedure of division base on the accompanying elements: Statistic: This kind of division in light of the variables, for example, age, sex, accepted
and standards of clients (Rihova and et. al., 2015). This assistance firm in gather gigantic
measure of data about populace and its particular qualities. It assume an essential part
underway process. Firm offer administrations to its clients according to their necessities
and prerequisite for fulfill them. Organization educate clients about its items with help of
SMS. This assistance firm in make a solid client base. Geographic: Under this division procedure occur of components, for example, state,
nation and district and territories in which clients live. Homebase offer its administrations
of SMS to school going understudies. One of the principle advantage of this kind of
fragment is that it help firm in produce more number of benefits. Psychographic: Segmentation on premise of way of life diversion and enthusiasm of
individual is gone under this (Schwepker and Schultz, 2015). This comprises those
market in which nature of item and brand is more noteworthy as contrast with its cost.
Organization focus on those clients who are not moderate for cost of products. People
under this attention on their sumptuous life. This comprises identity, status and
demeanour of people. Behavioral: This is another sort of division, in this clients information reports and
patterns are break down by firm to inspect their image dependability and different
elements.
 Blended technique: Under this sort of division all the above procedures and elements are
use by firm for section the market.
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P5 Evaluate B2B and B2C decision making models with opportunities for customer value
creation
Decision making process enable and signify as one of a most appropriate thing for every
association on which their whole working is depend upon (Stark, 2015). Judgement needs to
consider all aspects whether they are positive or negative and then determine suitable relation of
them so that effective and appropriate consideration would used to take place. Decision making
process get impacted through certain consideration which have to estimated by managers of a
company so that suitable process could be implemented. Business choices are to a great extent
rely upon type in which they are performing. B2B and B2C are known as real business compose
and choice taken under this fluctuate frame each other. For improve proficiency, it is
exceptionally basic for troughs of Homebase to do endeavours to expand the adequacy of basic
leadership process. There are some model related with basic leadership process utilized as a part
of B2B and B2C. This can be better comprehended by following table:
Decision making models B2C B2B
Rational or classical model of
decision making:
In business to customers
aspect, rationale model of
decision making need to
utilise. Here, management
have to understand all
associated issues of a company
and then frame objectives in
context of them. Homebase
could utilise this approach so
that better and effective
judgement for clients could be
underpin.
Rationale decision making is
helpful for large firms where
things used to get execute in
better and signified manner. It
is really essential for business
to understand complexity of
various aspects properly so
that chances of gaining
effective and suitable gain
could become possible.
Homebase need to understand
this aspect in better manner.
Retrospective decision making
model
A business always need to
produce such kind of products
and services which signify
some value to their users.
A business could gain success
only when appropriate and
relevant judgement could be
determine. Retrospective
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Thus, retrospective model of
decision making is helpful in
such scenario where
judgement could be led down
on the basis of valuation of
products and services.
decision making model enable
employees to do work
effectively so that better and
efficient outcome could be
gain. Homebase need to done
this aspect and attribute
properly so that effective and
efficient outcome could be
drawn.
TASK 3
P6 Different techniques and models organisation can apply to increase customer relationship and
customer loyalty
Customer relationship is a process where an organisation used to facilitate better and
supportive bond with their clients (Weinstein and Pohlman, 2015). This relationship is helpful in
managing value towards them through providing better and appropriate quality products and
services. Along with this, customer loyalty stands when a user used to procure products and
services of a particular brand again and again. Hence, it is really essential for management of
Homebase to determine all such tools, techniques and methods which could be applied by them
in order to gain better customer base with effective relationship as well as their revisit towards
product and services become possible: Social media technique: One of a major tool which could be applied by a firm is social
media. Here, they could utilise various social media platform for managing products and
services as well as providing information for it. By using Facebook, G mail and other
section, management used to deliver message about their products and services and
placed order as well. This will suggest them in crafting a better customer relationship as
well as management of loyalty (Xu, Peak and Prybutok, 2015). Thus, this recent and
current scenario model facilitate an option to underpin the best thing which further enable
in signify effective and better gain. Telephone communication: Business have to determine that customer relationship could
be framed through managing better working and identify their needs and wants. It is
really essential for management to organise a telephonic survey for a company which
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facilitate and enable in designing supportive working. This tool will used to support
Homebase in order to gain and determine better relationship with their clients. Along
with this, customer loyalty would be craft in an appropriate frame where individual start
purchasing particular products and services.
 Reward system: Sometimes, management need to provide appropriate reward to all their
users and customers. This reward system enable and support in managing things properly
so that better and supportive outcome could be drawn in terms of loyalty and repeat
purchase. Hence, management need to understand such attribute properly and then
provide suitable rewards to their clients. Homebase will going to formulate suitable
relationship with their customers with implementation of appropriate reward system.
CONCLUSION
From the given data, it can be compressed that for make progress and development in
advertise, it is exceptionally basic for each undertaking to better fulfil the requirements and
needs of its clients. Further, make and keep up great association with clients is additionally
exceptionally fundamental for get long haul benefits. These is an idea called client esteem
administration which can be use by firms for this. With help of this firm can embrace items
according to the necessities and prerequisites of its clients. Further, division can be use by an
organization for distinguish the clients to which organization needs to convey its items for
produce more number of benefits.
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REFERENCES
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Rihova, I. and et. al., 2015. Conceptualising customer‐to‐customer value co‐creation in tourism.
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Annual Conference. pp. 132-133. Springer, Cham.
Xu, C., Peak, D. and Prybutok, V., 2015. A customer value, satisfaction, and loyalty perspective
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8 Pros and Cons of Customer Lifetime Value. 2015. [Online]. Available
through :<https://brandongaille.com/8-pros-and-cons-of-customer-lifetime-value/>.
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