Customer Value Management: Homebase Analysis and Strategic Insights

This report examines customer value management (CVM) with a focus on customer lifetime value (CLV) within the context of Homebase. The report begins by defining CVM and CLV, emphasizing their importance in enhancing company revenue and profitability. It explores various elements used to ascertain CLV, such as present value, customer loyalty, mathematical formulas, and personalized CLV, and highlights the advantages of CLV for an organization, including increased reputation, profitability, and financial growth. The report then delves into factors impacting CLV, such as the need for professionals, product category participation, measurement challenges, and the influence of online and offline channels. The analysis extends to market segmentation, examining B2B and B2C decision-making models, and concludes by discussing methods to increase customer loyalty and relationship management. This report provides valuable insights into CVM strategies for business development, focusing on practical applications for business growth and customer retention.

Customer Value
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Various elements to ascertain customer's lifetime value.......................................................1
P2 Advantages of customer lifetime value to an organisation....................................................3
P3 Factors impact the customer lifetime value...........................................................................4
TASK 2............................................................................................................................................5
P4 Types of market segmentation which can be applied to customer base................................5
P5 B2B and B2C decision making models.................................................................................7
TASK 3............................................................................................................................................9
P6 Different methods and techniques to increase customer loyalty and relationship.................9
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Customer value management is that techniques and method which has been evaluating
and measuring the organisation customers views of perceived value for delivering effective
money towards their competitors buyers. It is termed as that art which help in increasing
customer value in individual manner. This will mainly designed and prepared for company
which highlighting the major business operations and functions which directly affect on
company profitability and productivity in effective manner. This is the main feature and
characteristics of particular concept which assist company for analysing and examining the
customer value, concentrate on insufficient resources for making competitive benefits. Along
with this, it is necessary for company is to determine the customer lifetime value which is
required for an organisation so this will help administration for taking right and appropriate
decision in proper manner (Hammer, 2015). The report is based on Homebase which is discussed
in this project. The major element is to measure and evaluate customers lifetime value and also
gain advantages which are described in this assignment.
TASK 1
P1 Various elements to ascertain customer's lifetime value
In the current business environment, customer relationship will play an essential role in
enhancing the company income and revenue. Along with this, company will generating high
amount of profitability at the time when buyers purchase large amount of items. The loyal
customers are the major source which has value for the firm but this is scarce in quality. Then the
maximum efforts can be done by the company for enhancing the customers value and formulate
effective strategies and policies along with desired goals and targets of the firm. Homebase is the
broadcasting company which serve and offer SMS facilities and services for getting potential
goals and objectives in appropriate manner. Also firm will performing different efforts by
delivering effective and good services to their buyers and try to satisfying their all needs and
wants in better way (Hollensen, 2015). This concept help in generating high amount of
profitability. The approaches and concept of customer lifetime value is used by company to
forecasting effective values and also maintain the strong relationship with their desired
customers. Along with this, CLV should be described in terms of periodical value that can
declared for predicting the 12 months relationship which determined the value will be £ x. with
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the help of this, company can retain their customers for long time period and as per this result, it
will assist in analysing the income and productivity of firm. The main motive of the firm is to
maintaining and managing strong relationship with their buyers that will assist in creating huge
amount of profitability and revenue. There are various elements which can used by Homebase
for measuring customer lifetime value that are as under: Present value – It is that elements which addressing the customers point of view towards
company goods and services (Kerzner and Kerzner, 2017). Along with this, it will
indicates the discounted value which present cash flows that are acquired by firm
consumers in proper manner. Therefore, this will captured the time value money which
assist in retain the large number of buyers for lengthy period of framework. Along with
this, the periodical value should be included in this. Customer's loyalty – In addition to this, CLV mainly depend on customers loyalty. With
the assistance of this, organisation can retain their buyers for long period of time. Loyalty
of customers assist firm for surviving in the large market place of specific time.
Therefore, this will increasing the CLV concepts. The customers loyalty provides
competitive advantages to company and lack of reduction in the company income and
profitability. Mathematical formula – In this, specialist determine the customer relationship value
(CRV) in terms of monetary price that will be considered with the assistance of
mathematical techniques and methods in appropriate manner. The formula is included in
this that is total financial gain of company separated by large number of time period
when customers connected the organisation. It can indicated that average income of the
company generated by buyers (Kim and et. al., 2015). Thus, company will perform
different efforts for motivating their customers towards purchasing their innovative and
creative products of the Homebase. Apart from this, this is one of the helpful and
effectual elements which assist firm for analysing the customers relationship value that
help them in retaining their employees as well as purchasers for lengthy instance frame. Personalised CLV – The company measuring CLV on the basis of broad so this does not
get much, at the time when company determine value on the basis of person and this can
be point out as demonstration towards customer measure.
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 Cohort analysis – This is that analysis which indicate the large group of individuals who
are sharing their similar features and characteristics in proper manner. Along with this, it
can also indicate that there are different situations which directly affect on CLV for
maintaining and developing strong relationship with their desired buyers.
All such major elements are assist company for making and creating huge image among
large number of customers (Kotler, 2015). This will help in enhancing the profitability and
productivity of company which make sure that it will survive in the market for long time period.
P2 Advantages of customer lifetime value to an organisation
CLV provides and deliver number of various advantages to the firm which help them in
gaining attention of more customers towards their services and facilities. With the help of this, an
organisation can create strong and effective customer base which can easily generating huge
amount of income. Therefore, CLV concept also assist in making positive image at large market
which help buyers for purchasing their different types of goods and services. Along with this,
this will ensure that company survive in the market for taking long term advantages. There are
various types of customer's lifetime value which are described as under: Increasing reputation of company in market – Customer relationship value assist
company in developing and building a positive image of an organisation at large market
place. This will improving and maintaining the goodwill which help in attracting more
customers in better manner. This is required for firm is to increasing the income and
revenue and also provide an opportunities which help in serving to large number of
customers in proper manner. In addition to this, it will increasing the market share which
help in surviving for long time period. Increasing profits and ensure maturation of organisation – In this, technology will play
an essential role in the concept of customer relationship value. This is necessary for firm
is to update their latest techniques and method which is used by firm for gaining
customers attention in better manner (Kotler, 2017). Homebase company should use
upgraded technologies which provide effective and innovative services to their buyers.
Along with this, they are adopting the concept of online marketing which can be used by
company for developing and maintaining new ideas. For company, it is required for
expand their business operation in other location where they will gain high amount of
income.
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 Financial growth – The major feature and characteristics of CLV is help the company
for making and creating strong relationship with their buyers. It will ensure that
customers loyalty help them in retaining for given period of frameworks. This is that
factor which indicate the finances that are invested with in effective business transaction
and production procedures (Kumar and Reinartz, 2016). Therefore, it will assist in
improving and maintaining the manufacturing process which help them in satisfying their
customers demand and requirements as per this result, they can analyse the appropriate
financial growth of an enterprise.
 Assist in retaining buyers – Customers is an asset which help in making and creating
high amount of profit value. They are those individual who are buying such goods and
services for satisfying all their wants and requirements. The concept of CLV concept
assist company manager for recognizing the major characteristics which can be adopt for
gaining attention of various number of customers. Along with this, this will assist the
company for retaining the customers for long time period and deliver competitive
benefits to the company.
Customer lifetime value is used by company for identify the upcoming opportunities for
expanding and maintaining the strong relation with their buyers. Therefore, it is that concept
which assist company for gathering and collecting relevant and correct data which are related to
customer's. Such things are assist company managers for taking better decisions and this will
increasing the income of an organisation.
P3 Factors impact the customer lifetime value
The concept of CLV is broad one which directly affect by large number of components
and at some time this will also affect on company ability and capability in negative manner. The
concept of CLV is consist with determining the customer life to offer different types of products
and services at reasonable price (Pearson, 2016). Along with this, an individual ready to pay for
company goods and services in better manner. Homebase using various tools and techniques
which is known as customer value management for enhancing the organisation income and
profits. There are different factors which directly affect on CLV then they will recognising such
factors in negative manner by which components of CLV can be reduced. There are various
factors which impact on customer value management that are described as under:
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 Need of professionals – in this factor, the company indicate lack of experts for carry out
measurement and calculations which are related to maintaining customer relationship
value. The non accessibility of professional outcome can be calculated in correct manner
and this will affect on decision making procedures that negatively impact of company
profitability (Rihova and et. al., 2015). Lower participation in product categories – The wrong measurement of CLV results can
reducing and eliminating the products quality according to the customers needs and
demand in better manner. This will decrease the market share of company which help in
becoming complex for firm to survive in the large market place. Therefore, lack of skilled
employees will create problems for completing the business operations and its functions
in appropriate manner. Challenging to measure – Without the assistance of professional, it is very complex for
company is to analyse and examine the amount of customer value management. Thus,
there are different components which directly affect on decision making procedures in all
optimistic and pessimistic manner. Therefore, straight computation of CLV is very
complex due to this modification can changes will be take place within business
surroundings. Online and offline channels – There are large number of advanced techniques and
methods of CLV which assist company in increasing skills and abilities of staff members
for developing them capable to survive in the competitive market place (Schwepker and
Schultz, 2015). Thus, it is essential for firm is to make development of different online
and offline sources which can make effective decision making process for organisation
that can lead towards optimising the usage of firm resources.
 Size of enterprise – In this, large organisation enjoys strong and effective customer base
but is very complex for measuring the CLV.
M1
The concept of customer lifetime value is one of the major concept which directly affect
towards large number of customers and they have effective ability and capability to deal with
different individuals. This will mainly determined as customers life for serving various types of
goods and services at reasonable rate. This will help in attracting large number of customers
towards their services and facilities in better manner. They are using B2B and B2C method for
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gathering and collecting appropriate data and information that are essential for increasing base of
customers.
D1
It can be analysed that customer lifetime value help in getting huge amount of buyers
who are come forward for developing and making effective profitability and productivity within
an organisation. The major key concept of customer lifetime value management is to identifying
the major affect of the company that directly affect on their performance as well as productivity
level. Along with this, this will assist in evaluating and maintaining the base of buyers at the
large market place.
TASK 2
P4 Types of market segmentation which can be applied to customer base
Market segmentation is that process which divide the market and customers into large
groups which are based on features, age, interest, level of standard, characteristics and some
more. Along with this, this will assist company for selecting specific segmentation and also offer
them effective products and services to satisfy them. It is not enhancing the number of firm
income and profit at the time when firm will easily retain their customers for long period of time.
In this, company manager analyse and identify an individual who pay firm goods and buying this
for satisfying their needs and wants. Segmentation is that process which help maintaining
customer value management and this will assist in retaining large number of buyers towards their
services and facilities (Kotler, 2015). There are various types of segmentation which aid in
analysing different customers needs and demand in the whole market place. CVM is that thing
which assist in managing and maintaining entire market where they deliver various types of
products and services.
Along with this, this procedures are carry out by company manager for increasing their
income and revenue (Stark, 2015). Generally, the process of segmenting market and offer them
different types of products which help them in making high amount of income. There are three
steps which are as follows: Segmentation – It is the initial stage where company can easily identifying the customers
behaviour as per their needs and wants. This will indicate that there are various services
and facilities which are offer to fulfilling all requirements and needs of buyers and also
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they can try to retain their customers for long time period. For selecting specific segment,
it is very essential for Homebase to determine the growth and success of potential
segments. CVL is associated with different segmentation which help in designing and
preparing all business operations and its functions in better manner (Kim and et. al.,
2015). The company can select any area, location and place which assist them in
increasing their customer base. CVM and CVL is that procedures which help firm in
analysing desirable customers who are willing to purchase their goods and services in
proper manner. Targeting – In this, company can choose one or more than one segment for offering to
their services and facilities. It is necessary for company is to identifying the creative and
attractive segmentation for creating large number of income or profits. For analysing
customer value management, the Homebase company can easily target their whole
market place as well as their desired customers (Kerzner and Kerzner, 2017). They help
in targetting large number of buyers for maximising their income and profitability.
 Positioning – Under this, the company will offer their effective goods and services to
their buyers for satisfying their appropriate needs and demand of their customers which
help in getting accurate position in the mind of people (Weinstein and Pohlman, 2015).
For positioning the company products, they required to analyse whole market place for
satisfying their customers needs and wants in better manner (Hollensen, 2015). CVM and
CVL is that process which help in examining the taking correct positioning at the large
market area.
Procedures of segmentation base: Demographic – It is that form of segmentation which are based on various factors that
includes gender, age, caste, religion of people. This will assist company for gathering and
collecting high amount of data about country population and their particular features.
Along with this, this will play an essential role in manufacturing process. An organisation
provide effective services and facilities to their customers according to their demand and
needs and also they required to satisfy them. In addition to this, firm inform customers
about their goods with the help of SMS services. This will assist firm for making and
creating strong relationship with customer base. Customer value management help in
segmenting the whole market place so that they can determining the buyers needs and
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wants in proper manner (Hammer, 2015). This is totally associated with the different type
of goods and services for analysing customers needs and demand. Geographic – Under this segmentation procedures, it will taking place of different
components that includes region, areas and state where customers can easily survive.
Homebase offer and serve their effective services of SMS to college going students. The
major advantages of this type of segmentation is that this will assist company for
generating large amount of financial gain. This segmentation is also associated with
customer value management which help in target those areas and locations where they
target desired customers (Rihova and et. al., 2015). CVM is used for analysing their
customers taste and preferences which help them in attracting more buyers whether they
are domestic and international. Psycho-graphic – This segmentation is based on lifestyle hobby and involvement of a
person which come under this (Xu, Peak and Prybutok, 2015). It will mainly consist with
those market area were quality products and brands majorly compared with their prices.
An organisation target such customers who are not progressive with price of effective
products. An individual primarily centring on their deluxe living. It will consist with
position, attribute, attitude of a person. Along with this, this process of segmentation help
in determining their customers attitude and behaviour which assist in analysing desired
choice and preferences (Pearson, 2016). Customer value management is related with
psycho-graphic because this procedures help in maintaining and managing all customers
needs and wants in proper manner. Behavioural – This is another type of segmentation in which customers reports and
trends are analysing by company to examine their products loyalty and major other
factors. Customer value management need to analyse the behaviour of an individual
which help in targeting large number of customers. After that they required to analyse
and examine the attitude and behaviour of a person in better manner.
 Mixed strategy – In this type of segmentation, all the major strategies and aspects are
used by organisation for segmenting specific market.
P5 B2B and B2C decision making models
The process of decision making is treated as one of the essential procedure of each firm.
The company manager role is to recognising and identifying all the components which direct
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affect on their desired operations. Along with this, business decision mainly depend on that type
which help in performing effective functioning. In an organisation, B2B and B2C setting are type
of business which help in taking decision in better manner. For increasing effectiveness and
efficiency, it is required for Homebase manager is to do efforts which can easily developing
decision making process. There are different model which are related with decision making and
it is used in B2B and B2C. This can be analysed and understood by following table:
Decision making models B2C B2B
Rational or classical model of
decision making:
It is the effective model which
help in making decision in
better manner. In this, decision
has been taken which are
related with business to
consumer with the assistance
of rational model. This will
assist to define the clear issues
and problems which occurs in
the company. It is useful for
small firm because it will
indicate appropriate goals and
targets in proper manner.
This will assist business in
implementing all business
operations and their functions.
There are different elements of
decision making process which
are determined in this. Along
with this, this model is useful
for big organisation.
Administration or bounded
rationality model
In this, decision making
concept addressing the target
goals which help in improving
entire business performance.
All the major options can be
analyse by decision maker for
taking effective decisions.
B2B mainly consist with
alternatives so this will assist
in achieving with set goals and
B2B is that tool and method
which can be used by higher
authorities for reaching with
desired goals and targets in
better manner. There are
certain wide places which
assist in taking accurate
decisions. A company manager
has large number of opinions
which has been chosen the
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objectives in better manner.
With the help of this, company
can take better decision for
making effective profitability
and income of an organisation.
appropriate one.
Retrospective decision making
model
In this, an organisation
undertaken manufacturing
value of products which
attracting large number of
customers.
Under this, staff members of
company are inform about
large scale of business
concern. This will assist in
maintaining and improving
their performance which
increasing the effectiveness of
decision making procedures.
M2
It can be concluded that there are different segmentation model which are related to B2B
and B2C and this will assist in generating and making effective marketing intelligence for
creating appropriate customer value in better manner. Segmentation should be chosen to
maintain and manage growth of organisation in better manner. For the help of this, company can
generating huge amount of profit in effectively. There are various segmentation model such as
demographic, behavioural, psycho graphic, geographic and market strategy which are assist in
getting high amount of income and revenue.
TASK 3
P6 Different methods and techniques to increase customer loyalty and relationship
For became involved in service sector, Homebase offer various types of facilities and
services to their customers which can satisfy their demand and needs for long period of time.
Along with this, effective services of company is increasing the number of facilities and this will
assist in remain the competitive advantages in business surroundings. With the help of getting
high level of success and growth, it is essential for company is to make and create strong
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