Customer Value Management: Strategies for Homebase (Marketing)

This report provides a comprehensive analysis of customer value management (CVM) strategies, specifically focusing on the context of Homebase, a home improvement company. The report begins with an introduction to CVM, highlighting its significance in enhancing customer relationships and driving business growth. Task 1 delves into the components essential for calculating Customer Lifetime Value (CLV), including formulas, such as Historic CLV, Predictive CLV, and the simple CLV formula. It also examines the benefits of CLV to an organization, such as cost savings, increased customer loyalty, and improved marketing techniques. Furthermore, the report identifies various factors influencing CLV, including service levels, product offerings, market stability, and company objectives. Task 2 explores market segmentation strategies applicable to a customer base, with a focus on demographic segmentation. It also analyzes B2B and B2C decision-making models. Finally, Task 3 discusses techniques and methods to enhance customer relationships and loyalty, such as SMS communication and branded products, offering insights into practical applications within Homebase's marketing efforts. The report concludes by summarizing key findings and recommendations for optimizing CVM strategies.

CUSTOMER VALUE
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Components that enable an organisation to determine and calculate a Customer’s Lifetime
Value...........................................................................................................................................1
P2. Benefits of customer lifetime value to the organisation.......................................................3
P3. Factors that influence the customer's lifetime value.............................................................4
TASK 2............................................................................................................................................5
P4 Market segmentation strategies that can be applied to a customer
base:............................................................................................................................................5
P5 B2B and B2C decision amking model...................................................................................7
TASK 3............................................................................................................................................8
P6 different techniques and methods organisations can apply to increase customer
relationships and customer loyalty:............................................................................................8
CONCLUSION..............................................................................................................................10

INTRODUCTION
Customer value management is the activity where an organization increases their
consumers through online procedures. CVM is an art which is increasing buyers. In this report,
Homebase describes SMS communication easily adopt and through SMS company provide their
specific details about the products to and their service how to they supply products to customers.
Mainly, Homebase is home improvement company provided their customers to home
improvement products in retail price like garden, kitchens, outdoor living, paint & decorating
etc. In this report, components that enables an organization to determine and calculate the
benefits of CLV are included (Fitzroy and et.al., 2016). Also, factors that influence customer’s
lifetime value and types of market segmentation strategies applied to customer’s base, B2B and
B2C decision making models as well as different methods and techniques applied to increase
customers relationship a consumer are discussed.
TASK 1
P1. Components that enable an organisation to determine and calculate a Customer’s Lifetime
Value
In Homebase, several components help to calculate the customer's lifetime value. In those
components helps to determine the formulas which calculates the all over CLV. The component
includes the traditional and simple formulas which define the annual cost of the per prospectors
and consumers relationship. In the Home base marketing manager understand the all over
revenue of the CLV.
Calculate customer’s lifetime value- Marketing manager at Homebase determines the
CLV require looking at the length of the customer’s retentions rate, average profit margins per
customers and customers churn rate. Moreover, several ways to calculate CLV in Homebase. To
calculate the CLV include the traditional and simple formula.
Historic CLV- In this marketing manager at Homebase defines the sun of all profits form
the past purchase and based existing consumer data from a specific period.
Predictive CLV- In this manager allows finding how much revenue a prospector will
generate from the business. This component's considerer more complete assessing CLV. The
predictive method determines the current value of the customers and determine how consumer’s
value will evolve with time.
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Simple formula CLV- This is most basic way to determine the CLV is added the revenue earned
from customers and defines the average revenue multiplied by the average of customer’s
lifespan.
(Annual revenue per prospector*consumers relationship in year)- Clients acquisition cost
For example- Home generate $3,000 per year customers with an average customer's lifetime of
10 year and CAC of $5,000 for each customer. And the organization calculates like that-
$3,000*10-$5,000= $25,000
This formula helps to calculate the annual revenue of the company and also calculates
each profit of customers.
Traditional CLV formula- In this formula marketing manager at Homebase defines the
company gives discount and then calculates the overall coast of the company (Flint, and
Woodruff, 2014). This traditional formula a help to take discount rate and considerations provide
more details to understand CLV. In addition, marketing manager defines the CLV break equation
and the individual cost a profit of each year. There is the important pint which defines the
traditional calculate formula-
 Gross amount *(holding rate/[1+rate of discount -retentions rate]
 Rate of discount
 Prospector retentions rate
 Average gross margin per buyer lifespan.
This formula defines customer’s revenue, time and allover year discount to account for
inflation. If manager is not sure about the discount they consider with other organizations and
knowing the discount rate of products. Home base is home improvement company their
marketing manager calculates cost of the all-over products and also defines the retentions of
customer. This formula help to increasing the customers' retention value and also defines each
customers' revenue on the each products.
Estimate CLV- This component's analysis the Homebase consuming power and the
average order of business. Marketing manager analysis the $50 and 10% chance of coming back
and repeat purchase and the finally assume cost $15 to each customers the total revenue can
expect to get from each customers to average value divided by one minus the repeat purchase
rate like $50(1-0.1) =$55.56 and subtract purchase acquisitions cost that and get a customer's
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lifetime value of $40.56. Marketing manager form this determines all over revenue of customers
and calculations of year.
P2. Benefits of customer lifetime value to the organisation
Marketing manager at Homebase define the benefits one consumer are buying goods and
service over the lifetime. It is like that where company using marketing of product and focus on
retaining consumers by upping their buyer levels. The benefits define the marketing manager to
increasing more customers in the company and supplying their product to the organisation and
make profit. Marketing manager also ensure their customer are having quality products and also
give online and offline service.
 Save money- Marketing manager at Homebase don't waste money to having expensive
procedure and not invest money to gives ad on television to incensing marketing, they
also not hirings sales man to do marketing door- to door they save money to do send
specific SMS to their consumer to provide details to their customers about the exclusive
deals and exciting products (Goetsch, and Davis, 2014).
 Encourage barns loyalty- Marketing manager encourage their employees to make
loyalty on their customers like they reward to their customers and gives discount deals so
company increasing customers retaining process and also having benefits. Homebase
mostly provide their customers to branded products which cost are high and quality is
excellent.
 Better improvement- To make better improvement marketing manager try better
marketing techniques like they simply send emails and SMS and examines which
procedures is better to provide details about the company. Manager examines the SMS
service is better to provide specific details to the customers and also define the offer deals
and discount price products through SMS.
 Gain more sales- Marketing manager know about the customer's test and their demands
from the markets. To increase more sale they provide their customers to quality product
like they give kitchen improvements products and home décor products which have long
life and having never complains. Those products attract more customers and also
increasing sale. Marketing manager also learn how to gain more sales procedures to make
benefits to the organizations.
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 Save time – Marketing manager at Homebase define they make strategies which make
benefit sot the company like they save time for send SMS to the customer so they save
time for gives advertisement and other ads on social media and other social sites.
Company only concentrating to making quality products and provide the best quality
products to their consumer's and don't waste time for other procedures.
 Retain long-time customers- Homebase company marketing manager determines the
CLV helps to retain long-time customers and Home marketing manager main strategies
to provide details to their customers through emails and SMS that strategies increasing
customer retaining long time. One more strategies to increasing retaining customers
process in the organizations to provide branded items to their prospectors. Every
customer's want quality products which have long-life (Kelly and et.al., 2014).
 Return investment- In the retail's industry every organizations have limited resource and
company want consumer Bering them maximum return benefits. In the CLV if long-time
customers retain in any organizations they will give per year maximum benefit and also
return investment of the company. Marketing manager at Homebase gives return
investment to the consumer and gain maximum profit.
P3. Factors that influence the customer's lifetime value
Factors are defines the company value and about their products and company profiles.
CLV calculates what Homebase mainly sell and what kind of products they provide to the
customers and their cost average per year. Most of the factors defines the cost of the product in
to company and also defines the products that supply organization and also adopts many
advantages upon the company. Marketing manager handled the market stability and company
objectives. They also handled all the marketing department service and responsibility of the
marketing department and timely update search products details in market. Here are following
factors that influence customers lifetime value-
 Service and promise levels- Marketing manager at Homebae provide their customers to
home improvement products like kitchen decor, outdoor living, garden etc. marketing
manager promise to their clients to provide better quality products to their competitors
and give promise to the clients if any issue they having related to the products they have
right to return or change products. They also promise to their customer's to provide
quality and branded products which is in affordable price.
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 Product you sell- That factor influence to CLV because Homebase always ensure the
products and service that they provide etc. the customer is according to customers
satisfactions and according to customers demands. Marketing manager also ensure the
products which they give to the customers is both higher and lower people afforded.
Homebase company provide mainly to their customers home improvements products like
garden, kitchen decorate, furniture etc.
 Market stability- Factors influence to CLV because the continuously develop new
technique and technology in the market. And it difficult to make better relationship to
customers because the many competitions are held in to the market. All competitors
present quality product sin the market. But the marketing manager make strategy to
having stability in the market so company retain their customers to long-time.
 Company objectives-This the main factors which influence most to the CLV every
company have objective to supply better goods and examines what factors influence to
the customers. Marketing manager at home base take strategic decisions which help to
gain more profit and also calculates the cost of the company. The main objective of
Homebase to retain customers long times. In 2016 marking manager defines the 10%
increasing products quality to the company. In details marketing manager mainly defines
the main average of company adopts to marketing their product via through SMS and
company objective to increasing their marketing via SMS because form this company
retain their customers mostly to long time.
 Protect products- this factors defines the Homebase protect their customer's to go other
competitors they consult to their customers only use Homebase company products
beacuse they only provide barned products and also gives quality service according to
their customers. That factors influence much to CLV because marketing manager at
Homebase because they supply their own organizations products and don't copy to other
brands products. Mainly their competitors only challenges to present better quality they
not give overlapping the company products (Keyte and Locher, 2016).
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TASK 2
P4 Market segmentation strategies that can be applied to a customer
base:
Market Segmentation determines to divide market according to customers characteristics
and different groups. Many reasons for organisation have done market segmentations. Market
segmentations mainly based on target market. The segments process by those tools which defines
how to divide market in groups such as demographic, psycho-graphics, behavioural, geographic
or combination strategy. Those segmentation helps to make strategy which break down a target
market audience into smaller or manageable group. Consumer leads loyalty brand and ultimate
higher profits for a product or service. Marketing segmentation strategy help business to predict
where goods and service are most wanted. Homebase marketing manager ensure that
segmentation according to customers requirement and demands. For example different cellular
companies now a day design different cell phone for boys and girls and other example different
classes of airline service like business class, economic class etc. the main purpose of
segmentation to divided each customer to their needs. Here are types marketing segmentation
strategies which applied to customer's base-
 Demographic segmentation- in this segmentation strategies Homebase marketing
manager divide their customers to according to their gender, education, income,
occupation, generation, race, family size, religion, nationality etc. boys are different
segment and boys are different market segment and adult or teenagers are different
market segment. Company segment to some customers who are low income and some are
higher income. There are products that suit the choice of well-educated and some are lees
educated.
 Psycho-graphic segmentation- this segmentation Homebase divides their customers to
basis of characteristics. This types of segmentation divide their customers to lifestyle,
social class, personality or habits. Social class define like person who are upper class
stylish which purchase costly products. Similar to person have different lifestyle will
have different choice. Some person which have traditional choice they select traditional
life style (Kumar and Reinartz, 2016).
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 Behavioural segmentation- this segmentation Homebase divide their custoems to group
based according to their attitude , uses and knowledge behavioural segmentation includes
useable rates, user rates, benefit rates occasions. For example some customers to look
beautiful they purchase beauty products. Some person who like gifts they purchase gifts .
Marketing managers at Homebase consider this is the best segmentation to starting point
of start business.
 Geographic segmentation- in this segmentation Homebase marketing manager divides
their customers to according to regions , states, countries, cities, neighbourhoods, climate
density etc. marketing defines they customers are belonged to many cities and countries
and their test is also changed similarly company also divided their customers to according
to their nationality and their test. In those things all customer have lifestyle, culture,
language region all is different.
 Benefits segmentation- in this segmentation strategy marketing manager divides their
customers to according to benefits like quality, customers service, special features,
performance, or other benefits. Many business organizations use this types of
segmentation like furniture, costomers, electronic, industrial clothing etc.
P5 B2B and B2C decision amking model
B2B decision making model- Business-to-business markets different compared to
customers market in two ways first business-to-business making process and customers purchase
decision model. Business to business decisions are making buy several customers and employees
and each specializing in a different field. Second B2B decision makers are accountable for their
judgement. In the B2B decision making model marting manager understand the decisions are
related to employees and customers both. Company examine the needs of customers and also
examine the cost of the product and then take decisions (Porter, and Kramer, 2019). Mainly
business-to-business decision making model, determines to business with one organisation to
another organizations and they supply their goods and service to each other and take decisions to
increasing sales. In this B2B model mainly steps involve- Gathering information- in this marketing manager defines when bushiness established
what information is reacquired to make best decision.
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 Identity a problem or opportunity- after the gathering information manager determines to
identity the problems and solve them Analysing the situation- when business started analysing the decision maker considers all
starting angles n the problem or opportunity. Developing options- Homebase marketing manager get creative and consideration every
possible solution and also make strategic decisions to the company. Selecting offers option – In this step marketing manager analyse the risk and problems
might result from decision making from the marketing manager.
 Action on the decision- in this step marketing manager at Homebase define the
implementation plan consider between employees and organizations.
B2C decision making model- this model define the business between consumer and
organizations and they take decision to selling direct goods and services to their customer's. In
this model marketing mange define how the customer involve to making decisions in
organisation. In Homebase company customer are considered to products quality and their brand
they also consider about the reaction on the products of customer they also ensure each products
they supply to the customer they already available in the market to try to innovate the products
and also make better quality products. In the B2C decision making model marketing determines
some step s where organisation and consumer making decisions- Advertisement based- In this marketing manager at Home base take decision to include
customer which methods are best to create advertisements of products. How to retain
customer into they organizations (Ranjan and Read, 2016). The min of Homebase
company to retain their customer long time and customer also help to making decision to
increase company growth. Direct sell- In these step's organisation directly sell their products to the customer. Where
customers defines the products what they directly sell to check and then sell to the
customers and also check the expiry dates and other details delivered.
 Online intermediaries- This step marketing manager defines to make decision on online
selling, how to improve that process, it also determines which procedure and what types
of methods are defines on to the organizations. Marketing manager consider with
customer how making better improvement service and what procedure are needed into
the organizations.
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TASK 3
P6 different techniques and methods organisations can apply to increase customer
relationships and customer loyalty:
Money cannot buy one thing to need in business is customer relationship. It's all about
the to research people who believes In product of organizations how to tracking those people.
Customer relationship mainly best on organizations products quality and how to the selling their
product it all about to make customer loyalty (Stark, 2015). Powerful relationship don't want
meeting or any kinds of events when organization provide quality problem and solved customers
products related problem those things are made good relationship between company and
customers. In Homebase company marketing manager determine how they build good relation
the customer. Manage details about the relationship they send their customer to details about the
latest products and also provide information about exclusive deals. There are various techniques
which defines customers relationship within organizations
 Build network- To increasing relationship with organizations Homebase marketing
manager build their network includes customers, partners, suppliers, contractors, friends
family and people where meet. To build network this help to increasing their customers
relationship. More benefits of these techniques to know customers test and also know
about their demands and requirements.
 Improvements communication- To increasing customers relations and customers
loyalty marketing manager directly communicate their customers through SMS and
emails. Moreover, manager mostly communicate their customer to through SMS service
because this process is adopts mainly very organizations to improve their relationship
with customers.
 Reward loyal customers- In these techniques mainly the Home base company gives
rewards their loyal customer because they are repeat profitable and repeat customer. And
they also encourage other people to buying Homebase products. Some customer also
gives their feedback to provide more service like home delivery or online to improve
better relationship to customers.
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Methods- Methods are described the ways which helps to increase relationship with customer's.
Customer is crucial part of every business and making relationship with customer is growth of
any business and customer' are helps to defines organizations weakness and strengths-
 Be a problem solver- To make good relationship with clients Homebase marketing
manager try to solve customer problems like if customer have any kinds of problems
relates to the products Homebase solve their customer problem to return their products
and exchange products.
 Get know client better- To increasing and make loyal customer Homebase manager
examine what client exactly wants in their fields they try to developed new strategy from
that they learn more about the customers like they give discount deals form that customer
attract to the organisation and make and increase relationship to organisation.
 Be willing yes- To gives opportunity from the organisation client are had feeling to
buying only Home base products (Töytäri and Rajala, 2015). Because Homebase always
gives their customers to discount deals with different pattens like by one get one free, to
purchase one product other having 50%dis count or offer up-to purchase 3000/- products
etc.
 Ask more questions- when customer buying products to the organisation they ask
question about the products and their quality how much they like. They also ask about
the service what organizations provide like online order service and home delivery
service.
 Stay focus- Homebase marketing manager need to focus on those things which is make
profit to the organizations and make relationship with customers. Manager also focus on
needs of the customers and its fulfil or not and customer satisfied or not.
 Be a learner –To developed relationship with customers Homebase learn about their
customers like they stored their customers personal and specific details like birthday,
occasion and location etc.
CONCLUSION
In this above report, this is concluded customer value management is the process where
organizations increasing their customers to used different techniques, methods and also
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increasing the customer's relationship with organizations. In this report describe Homebase
marketing manager defines many procedures that retain customers long time but mostly SMS
communications process is adopted very organizations to retain customer's long time (Womack
and Jones, 2015). In this report define the various components which helps to determine the
calculations of the customer lifetime value or benefits of CLV. It also includes the factors that
influence customer lifetime value and types of market segmentation strategies that can be applied
to customer base. It report also determines the B2B and B2C decision making model and
different techniques and methods of organizations can increase customer relationship and
customer's loyalty.
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REFERENCES
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1-29). Springer, Cham.
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