Customer Value Management Strategies for Homebase: A Report

This report delves into Customer Value Management (CVM) with a specific focus on Homebase, exploring the concept of Customer Lifetime Value (CLV) and its significance. The report examines the components used to determine CLV, such as present value, mathematical formulas, customer loyalty, and cohort analysis, highlighting their advantages for businesses. It further analyzes the benefits of CVM, including increased market reputation, enhanced profit and organizational development, financial growth, and improved customer retention. Furthermore, the report identifies factors influencing CLV, such as lack of occupational groups, low participation in product variety, complexity in measurement, and the impact of online and offline channels. The report also explores market segmentation strategies, including segmentation, targeting, and positioning, to enhance customer relationships and drive business growth. This report is designed to provide insights into effective CVM strategies that drive customer retention and business success, contributing to the understanding of how businesses can maximize customer value.

Customer Value
Management

INTRODUCTION
Customer value administration is that method and tool which help in measuring
company's customers perceptions and views of the perceived value to supplying money against
with their competitors. It is usually known as that creation which assist in enhancing the
customers value in individual manner. This is generally prepared and designed by an
organisation for highlight the leading concern transaction which immediately impact on firm
gainfulness and productiveness. It is one of the main feature that has major concept and it will
assist in examining and analysing the customers measure, paradigm on deficient beginning for
developing and creating a competitive benefits in better manner (Weinstein and Pohlman, 2015).
It is essential for establishment is to ascertain the client time period measure which is required
for an organization and this will assist in pickings and preparing management suitable decisions
for maximising the income or profit. The study is supported on Homebase organisation which is
described in this assignment. Along with this, the major element for measuring and evaluating
the customers lifetime value and advantages that are fully discussed in this report.
TASK 1
P1 Different components to determine customers lifetime value
Homebase is the broadcasting company which provide and offer SMS services and
facilities to their target market place. Along with this, company will perform different efforts to
render appropriate income and profit to their customers for better satisfying their requirements
and needs or also generate large sum of net income. The major conception of consumer time
period worth is used by the company to estimated the value and also maintain better relation with
their customers. Customer lifetime value should describe as periodic value which declared about
estimated 12 months relationship and their high amount of value will be x euro (Xu, Peak and
Prybutok, 2015). There are assorted weather which is utilized by Homebase for calculating and
measuring the customer lifetime value management.
Present value- It is that components which addressing the customized percept towards
circumstantial goods and employment of the firm. This will indicate the discount value that will
existing in cash flow to get by customers within an organisation (Stark, 2015). Therefore, it will
cover the measure of wealth that aid in contain buyers for lengthy instance period.
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Mathematical formula- In this, experts ascertain the customers relation worth in term of
monetary system terms that can reasoned by the assist of using numerical performing and
implement in better way. A expression point in this that refer as entire gross of organization
which are distributed by special number of moths while customers join with the firm (Stark,
2015). It is one of the useful and effective elements which assist company in analysing and
examining the customer relation worth that aid in hold the customised for extended instance
period.
Customer's loyalty- CLV mainly depend on trueness of buyers or customized in proper
manner. With the assistance of this, firm can retain their customers for age-long example period.
The fidelity of customized help the institution to endure in the marketplace for extended instance
period (Kotler, 2015). Thus, this will increasing customers lifetime value. Along with this,
customers loyalty provide competitive advantages and reducing the amount of firm profitability
and income.
Personalised CLV- The company will measure and calculate the CLV on the advanced
basis at the time when an organisation considered the value on the basis of individual which can
indicate the presentation towards customers values in better manner.
Cohort analysis- It will indicate the large group of an individual who are sharing various
features and characteristics in appropriately. It will indicate the different situations and condition
which directly affect on customer lifetime value to make and create strong relationship with their
customers.
There are various elements which assist company in making and developing large
customer base (Schwepker and Schultz, 2015). Along with this, it will increasing the firm
profitability which ensure that firm will endure in the marketplace for bimestrial instance period.
P2 Advantages of customer lifetime value to the company
Customer lifetime value gain high amount of advantages where large number of
companies provide attention. For this, organisation will make and create strong relation with
their customers that will assist in increasing income level. Therefore, the concept of CLV help
the enterprise in creating optimistic picture in the large market place and also attracting sizable
amount of purchaser towards their work and facilities. This will make sure that company will
easily endure in the marketplace and also supply extended period welfare. There are various
advantages of customers lifetime value that are described as follows:
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Increasing reputation of company in marketplace- The conception of client relation
measure assist in keeping and processing a affirmative picture of organisation commodity among
potential customers (Rihova and et. al., 2015). It will improve the firm goodwill and attract large
number of buyers. All such factors help in enhancing the income of firm and also gives
opportunities to company for offering different types of goods and services in better manner.
Along with this, it will also increasing company market share and make sure this will survive for
long time period.
Enhancing profit and insure development of organisation- In this, technology play an
essential role in the customer relationship value concept. This will seen as important because of
their new and latest technologies that can used by an organisation for serve to their buyers.
Homebase should use updated and effective techniques which help in serve appropriate services
and facilities to their buyers (Rihova and et. al., 2015). Therefore, this will make sure that it
effective expansion of business operation and its functions for enhancing their income of the
firm.
Financial growth- The major characteristics of customer relationship value which assist
the company for making and creating strong relation with their buyer in proper manner. It will
ensure that loyalty among customers help the establishment for hold them for lengthy instance
period. It is that element which point specific finances that should invested in the business
growth and production procedures (Pearson, 2016). Moreover, this will aid in rising the
production procedure that will assistance in examine their customised needs and wants, try to
fulfilling all their requirements in better manner.
Assist in retaining buyers- Customers is the main part of each business because they are
help them in generating income and revenue for an organisation. They are those persons who are
purchasing firm goods for satisfying all buyers needs and wants (Pearson, 2016). The concept of
CLV management assist company manager for identifying the features of products which can
easily attracting large number of users. This will also aid the organisation for hold their
customised for lengthy time period and also provide competing welfare to the institution.
P3 Factors that influencing the customer lifetime value
The conception of CLV is the board one which get affected by large amount of element
and this will impact on organisation profit in destructive mode. The major concept or approaches
of customer's lifetime value consist with determining the life of buyers where they are serving
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and offering particular goods and also recognise that products price which are paid by customers
(Kumar and Reinartz, 2016). Homebase using the techniques and methods which is known as
customer value management is to increasing company income and revenue in better manner.
There are various factors which directly affect on CLV and also examine and identify such
aspects in negative impact of those components on customer's lifetime value can be reduced.
There are different component which straight affect on customized lifetime value administration
that are represented as below:
Lack of occupational group- This will show the need of experts to carry out the
calculations and measurements that are accompanying to CRV (Stark, 2015). Along with this,
non availability of experts outcome or results for accurate calculations and this will impact on
determination production process that negatively effect on organisation net income.
Low participation in product variety- The incorrect measurement of customer lifetime
value are reducing the quality of specific products according to the needs and demand of
customers. It will decreasing the activity portion which assist in seemly difficult for firm is to
live on in the big marketplace (Kotler, 2015). Therefore, absence of talented and accomplished
workers will make major issue and barriers for all concern dealing and its purpose in effective
way.
Complex to measurement- Without the help of vocation, it is very difficult for company
is to identify and analyse the consumer measure administration concept in proper manner. Along
with this, there are assorted element which straight impact on conclusion making process in both
positive and negative way. Thus, appropriate calculations and measurement related to CLV is
actually complex because this will make and develop changes in whole business surroundings
(Kotler, 2017).
Online and offline channels- There are various number of methods and tools relates to
customer's lifetime value which aid institution for accelerative staff members acquirement and
quality for make them confident to endure in the huge competing concern situation. The
development and improvement of different online or offline channels which create decision
making procedures of firm that can lead towards optimum utilisation of resources.
Size of organisation- In this, large administration utilise powerful and effectual client
basic but it is very difficult for them while measure customer lifetime value.
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TASK 2
P4 Kinds of market segmentation which can applied to customer base
Market segmentation is the concept and procedure which classify the whole market area
as well as their consumers into different segments on the basis of age, interest, standard living,
features and some more. It will assist company in selecting specific section and offer them
desired goods and services which help in satisfying their needs and wants (Kotler, 2015). It is not
enhancing the organisation profits but this will help them in keeping huge number of consumers
for longer period. Therefore, in this organisation, management need to identify and examine
every individual member who are paying full attention on firm goods and they are try to
satisfying their needs and demand at market place.
Customer lifetime value is used by organisation which help in identifying the new
opportunities for expansion and creating healthy relationship with their buyers in proper manner.
Thus, such concept assist the company in assembling and assembling accurate data or collection
that are related to their customers. This will assist company manager for taking appropriate
decision and increasing income of the firm. With the assistance of this, company can retain their
buyers for long time period according to this outcome it will increasing the profitability and
efficiency of an organisation (Pearson, 2016). The main aim of this company is to create and
make appropriate relation with their customers that assist firm for generating large number of
income which compare with tough competitors.
It is that procedure which carry out with the help of company manager is to increasing
profitability level of an organisation. Along with this, segmentation has high desired growth can
be selected by manager. An enterprise can generate high amount of income and profit in proper
manner (Kim and et. al., 2015). This process of market segmentation are offer various types of
goods and services for creating income. Three stages are described as under:
Segmentation- It is that step which company can analyse and examine the behaviour and
needs of the buyers. This will indicate company facilities and services for satisfying them
according to their needs and demand and also holding their potential customers for long period
of time. For selecting the segmentation, it is very indispensable for Homebase is to considering
the development and performance of desired segmentation. Customer value management help in
analysing segmentation area where they are attracting desired customer who are willing to
purchase their firm services and products.
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Targeting- In his, company will select one or more than segment for offer their effective
services and facilities. An organisation can identify and recognise one of the most attractive
section which help in generating large number of profitability. With the help of CVM the
company required to target those people who are live in different sections of the country.
Positioning- It is the last stage which serve and supply products and services to their
customers which satisfying their effective desires and wants and also make creative image of
their products among customers mind (Kerzner and Kerzner, 2017). CLV is that process by
which the firm can easily take position at the large market place and also gaining attention of
customers for build strong relation with them.
Procedure of segmentation base factors which are described as under:
Demographic- In this that type of segmentation there are various factors such as age,
rules, norms, gender of their desired buyers. It will assist an organisation in gathering and
collecting data and information regarding population and their specific characteristics. This will
also play an essential role in manufacturing procedures. The company will offer and serve
different products and services which help in SMS. It will assist company in making and creating
strong customer's base. For example, retailer base their marketing strategies and policies on
demographic factors such as age, gender, material status and income of desired buyers who are
interesting in buying their goods and services. Customer value management required to analyse
segmentation among this demographic factor is help in recognise those buyers who are interested
to buying their company products and services in conducive mode.
Geographic- In this segmentation procedure this will take place of specific components
such as region and state, country where buyers can survive. Homebase serve and offer services
related to SMS to college going students. It is one of the major advantages of this kind of
segmentation which assist company in creating large number of income or revenue. Customer
lifelong value is that procedures through which the company can analyse different state, region
and country where they are attracting large number of customers at market place.
Psycho-graphic- Segmentation are totally depended on lifestyle hobby and interest of
individual are coming under this. It include those market place where products quality and brand
is became more important as compare with their pricing. An organisation will target those buyers
who are not progressiveness for goods price. A person are mainly focus on their luxurious and
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deluxe life (Hollensen, 2015). It will consist with status, personality and attitudes of an
individual.
Behavioural- It is other kind of segmentation classification where customer data
presentation and latest trends can be analyse by company for analysing their brand loyalty and
major other elements.
P5 B2B and B2B decision making models
The procedure of decision making is called as one of the most necessary activity for
every organisation. In current business scenario surroundings, customer relationship process play
a primary role for increasing the company outcomes or revenue. An organisation can generate
high level of profitability while customers buying large number of products. Along with this,
loyal buyers is the major source of value of the firm but it is scarce in nature (Hammer, 2015).
By the firm, maximum efforts should be done for increasing customers value and also
developing appropriate strategies and policies to align with particular goals and objectives of an
organisation. B2B and B2C are major part of business organisation type and take decision which
are totally different from each other. There are different models which are related to decision
making procedures and it is utilised in B2B and B2C.
Decision making models:
B2C (Business to consumer)
Rational or classical theory of decision making- It is consider effective model which
assists in decision making process. In this, decision which are take that are fully related to
business operations and customers with the help of rational model. It assist in defining the issues
and problems. Customer value management assist in developing and making effective decisions
in better manner. CLV and CVM are the major part of every organisation which help in
achieving desired goals and targets.
Management or bounded rationality model- Under this, decision making procedure
accomplishing the achievable goals and targets which assist in improving whole performance of
their business as well as customers. All the major options are analyse and examine by decision
maker for taking better decision (Hollensen, 2015). CLV consist with main alternatives which
assist company manager in gaining potential goals and objectives.
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Retroactive decision making model- Under this, company will undertaken this
manufacture of valuable products to attracting large number of customers in effective manner.
Customer value management attracting buyers towards their innovative goods and services.
B2B (Business to business)
Rational or classical theory of decision making- It will allow business in employing
transactions in better manner. There are various elements which help in making appropriate
decisions which are not observed (Kerzner and Kerzner, 2017). As per the CLV, the company
assist in managing and maintaining whole business operations and its functions.
Management or bounded rationality model- In B2B, this is that method and techniques
which is used by higher authorities for accomplishing desired goals and targets. With the help of
customer lifelong value, the company manager has large variety of alternatives where they select
only one.
Retroactive decision making model- In this, organisation employees are inform about
scale of business operations and their functions (Kim and et. al., 2015). It will assist in improving
their employees performance that can increasing performance while making decisions.
TASK 3
P6 Different methods and tools for increasing customers loyalty and relationship
In the service sector, Homebase offer and serve various types of services to their
customers according to their needs and wants and also retain them for longer time frame. Along
with this, effective facilities of organisation are increasing various number of services and assist
in competitive business surroundings. For gaining development and success, it is essential for
each firm is to make and create strong customer base. Therefore, customer loyalty gives huge
number of company advantages in better manner. There are various methods and techniques
which are used by company for enhancing customers loyalty that are as under:
Emails- It is one of the most effective and essential method that will help company in
developing and creating good relation with their buyers. In this, firm send email to interact with
their target customers (Hammer, 2015). For example, in amazon company if customer send email
for their issue then they will get their reply within some time.
SMS- It is another method and techniques whee a person send text message to the other
person. This is one of the common factor which is simple method and this can be used by each
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one and it does not need any internet services or facilities. It will assist an individual for making
and creating strong relationship with other person. For example, if a person to go to the mall for
shopping some items so the seller get their mobile number and after that if they have any new
scheme and offers in their products they are sending message to their regular customers for
promoting their items.
Telephone- It is another effective method and techniques which mainly consist with
conversation of two people. This will connect the two individual at the same time. This is one of
the benefit which provide solution of specific issues and problems in fast manner (Kotler, 2015).
for example, in customer care centres, the employees are providing 24 hour services to their
customers and also resolve their issues and problems in better manner.
Internet- In current time period, there are large number of people who are using internet
and different social networking sites that includes Facebook, twitter and YouTube for making
connection with others. For example, if an individual purchase some product through the online
sites such as flip-cart, amazon, etc. so the companies are sending them special offers and
discounting messages on internet.
TASK 3
P6 Different methods and tools for increasing customers loyalty and relationship
In the company sphere, Homebase offering and serve different form of work to their
customised according to their needs and wants and also retain them for longer time frame. Along
with this, effective facilities of organisation are increasing various number of services and assist
in competitive business surroundings. For gaining development and success, it is necessary for
each firm is to form and make powerful client basal. Therefore, customer loyalty gives huge
number of company advantages in amended way. There are assorted methods and techniques
which are utilised by company for enhancing customized trueness that are as below:
Emails- It is one of the most effectual and indispensable method that will help
organisation in processing and creating great relation with their purchasers. In this, company
transmit email to interact with their mark customised (Hammer, 2015). For example, in amazon
company if customer send email for their issue then they will get their reply within some time.
SMS- It is another method and techniques whee an individual direct textual matter
communication to the other individual. This is same of the common factor which is simplex
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method and this can be used by each one and it does not need any cyberspace work or facilities.
It will help an individual for making and creating strong relationship with other person. For
example, if a person to go to the mall for shopping some items so the seller get their mobile
number and after that if they have any new scheme and offers in their products they are sending
message to their regular customers for promoting their items.
Telephone- It is another effective method and techniques which mainly consist with
conversation of two people. This will connect the two individual at the same time. This is one of
the benefit which provide solution of specific issues and problems in fast manner (Kotler, 2015).
for example, in customer care centres, the employees are providing 24 hour services to their
customers and also resolve their issues and problems in better manner.
Internet- In present-day, there are large amount of group who are using net and various
societal system sites that consider Facebook, twitter and YouTube for developing relation with
another. For example, if an individual purchase some product through the online sites such as
flip-cart, amazon, etc. so the companies are sending them special offers and discounting
messages on internet.
CONCLUSION
As per the above mentioned study it will examine that Customer value management is
that method and tool which help in measuring company's customers perceptions and views of the
perceived value to supplying money against with their competitors. Homebase is the
broadcasting company which provide and offer SMS services and facilities to their target market
place. Customer lifetime value gain high amount of advantages where large number of
companies provide attention. The conception of CLV is the board one which get affected by
large amount of elements and this will impact on organisation profit in destructive way. Industry
sectionalism is that procedure and procedure which dissension the entire industry as well as their
customised into different units on the basis of property, involvement, standard living, features
and some more. B2B and B2C are leading portion of concern kind and take determination which
are totally different from each other.
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