Analysis of Customer Value Management for Homebase (Marketing)

This report provides a comprehensive analysis of customer value management (CVM), focusing on the application of CVM principles to the home improvement retailer Homebase. The report begins with an introduction to CVM and customer lifetime value (CLV), outlining the components used in CLV calculation and justifying the benefits of CLV for an organization. It then explores the factors that influence CLV, such as B2B and B2C models. The report also delves into market segmentation strategies, including geographic, demographic, and psychographic segmentation, and examines how Homebase segments its customer base. Furthermore, the report discusses techniques for enhancing customer loyalty and relationships. The analysis includes practical examples and calculations to illustrate the concepts. The report concludes by summarizing the key findings and emphasizing the importance of CVM in driving business success.

Customer Value Management

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Various components that help in determination and calculation of consumer's lifetime
value.......................................................................................................................................3
P2 Justify benefits of consumer lifetime value of organisation.............................................4
P3 Factors which influence the value of customer lifetime value .........................................6
TASK 2............................................................................................................................................7
P4 Types of market segmentation strategies..........................................................................7
P5 B2B and B2C decision making models and creation of consumer value opportunities...8
TASK 3..........................................................................................................................................10
P6 Different techniques and methods through which consumer loyalty and relationship
increase.................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Customer value management is a sort of art of gaining consumer individual value which
is often designed to make and attempt main activities which bear on potential of profitability and
revenues of consumer of telecom. A company can manage the clients and their opinions through
perceiving value wit the purpose of delivering money in order to make the business more
powerful. Homebase is a home improvement in British retailer along with garden centre with
various UK stores and many other countries as well. The company has organised new campaign
of SMS to render support to their activities of DM with promotional offers in their redeemable
online or stores (Adam, 2013). The company has uplift of 20% in their sales increment from only
SMS as well as 26.5% sales incremental driven through consumer who received both SMS and
Email. The purpose of this report is to demonstrate the understanding among consumer lifetime
value concept and methods of calculating those elements along with numerous segments in the
client base for creating of consumer value opportunities.
TASK 1
P1 Various components that help in determination and calculation of consumer's lifetime value
In the sector of business, this is required to focus on client's satisfaction and credibility to
manager the prosperity. Consumer values means the evaluation of distinct among entire worker
and benefits cost products. Consumer value seek to maximise the importance through estimating
offered product value, forming value expectation and usage of experience for rendering
satisfaction to buyers. There are traditional ways of marketing which help in the retention and
value for consumer. These ways need to first analyse the concept of retention, satisfaction and
retention of consumer.
Consumer satisfaction can refer to the a individual indulgence or disappointment after the
outcome of a person gained from the perceived performance of products of Homebase related to
their expectation (The 5 Benefits of Customer Lifetime Value, 2016). Retention of consumer
whereas are the marketing strategies which is managed for increasing the literature value of
consumer satisfaction, which Homebase can retain clients for the longer time period for
contributing to the benefits.
This lead to the new term which is consumer lifetime value which refer to single
significant metric for considering the clients. This aid in making important sales, product
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development, marketing and other business decision for supporting consumer. The procedure of
calculation of lifetime value analysis is time consuming process Through the help of CLV,
Homebase can easily seek out the outcome of SMS campaign considering the cost effective work
which help in retention, satisfaction and consumer value providing activities. This have various
merits such as:
 This help in better consumer value forecasting for longer period of time which help in
meeting the demands of consumer.
 Client's lifetime value can be better indicator for developing the efficiency and reduce
consumer dissatisfaction.
Evaluation of CLV is paramount for an enterprise like Homebase in order to assist the
business operation and activities. It avail in retention and supporting consumer satisfaction along
with organisation sustainability in business industry. Here is the part of calculation of consumer
lifetime value of Homebase for management of increment of sales in the company along with
measuring the revenues. Through undertaking the elements of consumer retention and
satisfaction, one can gain more recognition of brand.
P2 Justify benefits of consumer lifetime value of organisation
The consumer lifetime value defines the profits amount which focus over retaining of
clients and emphasising the level of purchase. There are various benefits which can help in
meeting the desired outcome in significant way for Homebase. Here are some of the benefits
which this render to their consumers: Saving Money: This is more cheaper approach which aid in retaining existing consumer
and carry out new potential buyer for consumers. Homebase can meet the satisfaction
level among consumer through the assistance of consumer value management. Effective Marketing: Value of consumer lifetime lead to better opportunities of
marketing which concentrate over the clients and focus over various features of
organisation and its products.
 Encourage Loyalty of Brand: This enhance the brand loyalty among clients increasing
the positioning among the consumer (4 Strategies That Drive Brand Loyalty, 2016).
Homebase can improve their position and gain potential buyer through the help of
managing CLV.
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In order to justify the referred calculation, this is required to consider the main concept of
these elements which is described under:
Customer Acquisition Costs: This refer to the cost of associated in regard of consumer to
purchase the service or product. The incurred cost by organisation to met the potential buyers
including the marketing research and accessibility cost etc.
Repeat Transactions: This refer to the system of payment which allows the organisation
like Homebase to process another system of transaction utilising the consumer information and
details which are already in the account of company. This allows the company to utilise the
information which were gather for the general and original transaction among with the process
another transaction amount to them.
Consumer Retention Rate: This can be measure in monthly, weekly and annually. The
rate of consumer retention is measured through scaling the consumer percentage amount which
one has retained over a certain time period (Adam, 2013). Different from the attrition rate, this
help in creating the life-cycle of consumer availing in the process of calculation of important
elements.
Understanding and managing a balance sheet is essential for the organisation like
Homebase which help in improving the financial condition of business of the respected
organisation at the certain time moment. Through analysing the data and information which have
mentioned above, the company can manage multiple benefits out of such procedure which can
aid them in overall business development. Thus, this is required to maintain proper value
management of clients for sustaining and gaining client satisfaction.
There are different methods and style of explaining the consumer lifetime value which
can help in the organisation. These equation required to be calucated in order to understand the
elements like acquisition cost, retention rate of clients etc. There are various methods which can
be used for the calculation but these two can be optimised in ideal manner. Here are mentioned
some of those elements which are elaborated under: Historical CLV: In this, the gross profits sum from entire historic individual consumer
purchase for their clients.
 Predictive CLV: In this types of evaluation, an analyses over the previous history of
transaction and several indicators that is forecasted by individual for lifetime value.
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Through these methods, Homebase can easily calculating the performance and other
outcome linked with the lifetime value of consumer which enhance the organisational efficiency,
market position and brand loyalty. Hence, this is essential for the company to manage the such
administration within a period of time in order to manage their outcome of applied operations.
P3 Factors which influence the value of customer lifetime value
This is stunning but true fact that most of clients or consumer do not create the revenues
amount which create only a small part of revenues of an organisation. They contain higher rate
of attrition which will not lead to equal benefits for longer time. Thus, despite trying for gaining
more amount of consumer, gaining access to some perfect clients or consumer is appropriate
(Hennessy and McCleary, 2011). Consumer lifetime value is the whole benefits which one
organisation like Homebase expect from their clients or consumer to earn through the
relationship of business. There are many ways of calculating the value of lifetime through which
heavy upliftment can be gained by the respected company. Though there are various elements
which are affecting the business activities, here are mentioned major two factors through which
business get influence i.e.: B2C: The deals of business to consumer influence Homebase help organisation in
meeting the consumer satisfaction. Through the help of this, the loyalty of buyer
segmentation of clients, consumer value and higher organisational values in the
competitive industry can be gained which lead to maximum amount of clients. Thus, this
influence the outcome.
 B2B: This has a huge influence on sales of products since the KPI of Homebase is
connected with it. This influence to the prioritising the activities of business along with
identifying accounts which are under-developed. Through planning for the long term
objectives are identified which help in measuring the features. Through the help of
management of lifetime value of customer, Homebase can manage their conflicts and
issues which help the overall organisation in development.
Thus, such factors influence CLV of Homebase in effective manner which can be
positive as well as negative. Though, these elements are essential to manage, satisfaction among
consumer can also influence the outcome of organisation in different ways. This cater loyalty of
brand among consumer which is creating their positive impact on experience which aid in
boosting the revenues of enterprise. Consumer sales and retention can be attained through this.
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Thus, it can be claimed that consumer lifetime value is paramount for growth and development
of organisation.
TASK 2
P4 Types of market segmentation strategies
Market segmentation is the initial step which is followed in the procedure of STP that
refer to the process of eliminating the whole market in the different segments according to
different subgroups. This is one of indispensable process which Homebase follow that helps the
organisation in gaining more access to consumer and a clear identification or view to the target
audience for the specific products and service (Bosworth, 2012). This assist in meeting the
desired amount of sales and volumes through managing the different strategies of marketing.
This unlikely dissolve or disappearing the witness, support the clients through assess the
preferences and traits of clients.
Here are mentioned some of the major market segmentation techniques which is followed
by Homebase for their clear consumer segmentation and targetting procedure: Geographic Segmentation: In the process of geographic segmentation, the elimination of
consumer is being made on their location or geographical factor basis. Homebase has
divided their clients on the basis of location as the organisation is rendering its services to
United Kingdom and Republic of Ireland. These elements are used by Homebase in order
to consider the elements of target audience more coherently. It help in focusing over the
consumer in impressive and effective style maximising the result of company's applied
operation and strategies as well. Demographical Segmentation: As per this technique of segmentation, the consumer of
organisation are eliminated on the grounds of demographic variables such as income,
religion, lifestyle of family, age and many other. Understanding the aspects of Homebase,
the company produce products for family people, business person, other home decor and
constructors etc. The organisation is a retailing store mainly sell home products,
bathroom services and many other. The products of organisation are majorly useful for
the people of age between 21-50 which eliminate the clients in more better manner.
 Psychographic Segmentation: Unlike segmentation strategies of demographic which
refer to the product purchasing service and product. This determines clients into
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subgroups on grounds of beliefs, priorities and motivation etc. Homebase can eliminate
their consumer who are more concern about environment and other elements.
The other step of STP is targetting the market and audience for service and products of a
company. After accomplishing the whole procedure of segmentation, organisation i.e. Homebase
determined the segment which require to aim and depend on their growth, area, benefits and size
of segments. It can be deigned as the market segmentation identification which are recognised as
being major likely buyer of enterprise of an organisation's product(Hawkins, 2013)s. There are
various targets groups which can benefits an organisation in various different ways. Homebase
targets to fancy and stylish women with the new brand recognition for their products. The brand
aim to people who drives to assist people for creating the personalised home looks.
After the targetting and segmentation procedure, the next phase in the process of
positioning. This refer to the manner in which company determine their market and their
products which are perceived through the target market like the whole. The positioning define
the market position of an enterprise Homebase which has the strong positioning in market but the
organisation is facing the doom cause of some reasons and controversies. Firm has been
designing various strategies of rebuilding the brand image in order to meet the desired outcome
or reconfigure the whole brand identity.
Thus, the process is essential for an organisation in order to understand consumer aspect
of an enterprise along with several different elements which can help in reducing the over-
expenditure along with balanced used of the resources of organisation. As the organisation have
been suffering from various issues and fall in market, through using SMS and email campaign,
which has evolved certain amount of sales of Homebase. The process is helping in gaining the
outcome of consumer lifetime value which is used for directed marketing to focus over the well-
defined clients and target the consumer. The analysis of various elements which can help in
meeting the desired outcome through specifying the audience and meeting them.
P5 B2B and B2C decision making models and creation of consumer value opportunities
Use of different techniques of marketing is required for the organisation which can help
one organisation in various ways so as Homebase. There are various models of business through
which trading can be managed in various ways. B2B and B2C are major business models utilised
for trading in different manner. Here are both of them mentioned as below:
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B2B Business Model: Consumer trade are typically much bigger than market. This
model use the concept of selling services and products to consumer. B2B identifies their seller
and buyer like the entities of business. This undertakes the application number that enables
forming relationship with their distributors, suppliers and re-seller etc. The channel of B2B
process of marketing may entail shorter as well as direct distribution channel to their focused
consumer i.e. mostly more smaller than their audience for a certain product or service (Castells,
2011). B2B contain small market which are vertical trade need consultative selling for longer
sell. This include the complicated process of buying through involving the people number. Thus,
the procedure is wholly oriented toward buyer traded by organisation.
B2C Business Model: Business to clients which lead to the transaction conducted
straightly between the consumer and organisation. This model of business differ from the
business-to-business model which refer to the commerce between more than two businesses and
sales of products directly to clients. This is a very single step procedure which has a different
seller and buyer relationship. There is more emphasis on improving the stronger seller and buyer
relationship in B2B sales. The decision of purchase is typically defined by budgets and
requirements in order to make rational decision related to business operations. The procedure of
purchasing is often determined in long time span and the sales is complicated which often
engage more months or time to complete.
Basically the opportunities of value creation depend on various elements such as
consumer perception, stimulation, consumer imagery and many other process which is explained
as below:
The perception of consumer refer to the activities and action in regard of organisational
products which can help them in meeting the business objectives. These rely on various factors
such as values, wants, requirements and other personal experiences. A stimulus refer to any input
unit to any of those senses for example packages, products, advertisement and commercials etc.
Homebase is facing the issues of various controversies which is leading to the company to fall.
In order to manage their goodwill, the organisation has managed an SMS campaign in which
company have gained more than 20% sales through the help of SMS and email & SMS
techniques which have proven effective one. Homebase can manage their stores and products
through rebuilding the brand image by opting the techniques of retaining and retrieving
information that can lead to better opportunities of development. The major purpose of value
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creation is to build value, trade and sell the products and brand to clients along with capturing the
profits and value.
Thus, the program or campaign were a successful one which is rendering better brand
image to Homebase helped enterprise in the recalling procedure and managing brand equity.
Through this, undertook activities of B2B and B2C can be managed in ideal manner.
TASK 3
P6 Different techniques and methods through which consumer loyalty and relationship increase
This is required for an organisation to manage effective relationship with their clients
through which one can meet their desired outcome and create a unique value of brand among
clients (Adam, 2013). Homebase is using the campaigns and media tools for the development
and increment of sales of their products which is essential for the company. Though, there are
various techniques or strategies through which one can maintain better relationship with clients
in which some are discussed under: Appreciation and response of clients: This is one of the best techniques which allows
consumer to meet their expected demands and needs according which can be attained
through responsive features to the provided facilities to consumer. Through this clients
can provide their opinions as well as appreciate services if they like. Email-Marketing: this is one of the most effective technique that create reputation as the
professional through rendering the free insights. This presents the short and long term
influence and cost effective technique help in keep in touch with their consumer through
updating little information or new plans to them.
 Rewarding consumer: through organising the technique of rewarding consumer and
supporting their potentiality with different exotic offers, an organisation can meet the
desired outcome and create a strong bond with their clients. This is less time consuming,
motivating and better techniques which always works.
Homebase can use these strategies for building long term relationship with their
consumer which lead to better productivity of incurred business operations (Castells, 2011). It
lead to creation of strong value among consumer which direct toward more revenues amount.
The new quick, and effective techniques i.e. digital media usage can also increasing the
Homebase's productivity as this is most favoured and used media tools in the recent era. Through
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media forums, social media, Homebase app and other activities, company can meet the
determined outcome. This is fast and interactive medium creating both side of communication
and better connectivity with clients.
Brand loyalty is the consumer behaviour pattern where clients become more brand
committed and make the purchase from that specific brand only. Such consumer only make the
decision of purchase from their regardless, cost and regardless etc. Homebase has revamped their
digital channel to make the consumer on highly individualised shopping experience which can
build the brand loyalty along with driving the more online sales. There are various techniques
which the company is using such as visual engagement, incremental innovation and immersive
content. There are various techniques which can be utilised for these such as: Up-selling: This is the encouragement practice which is used as higher comparable
product end. This technique is majorly used for the increment of satisfaction of consumer
from the client's activities (Bosworth, 2012). This help consumer in value visualisation
which the get through making purchase of higher paid products.
 Cross Selling: Cross selling technique identifies the service which satisfy the
complementary, addition requirements through the original items unfulfilled. This is
prevalent in which every commerce types, consisting the insurance agencies and banks.
The techniques is used in life-cycle campaign, during the checkout procedure of products.
Homebase is using the SMS and email campaign for gaining more consumer amount,
sales of products and satisfaction among consumer leading to the achievement of applied
strategies for creating value for consumer. Homebase use the cross selling and up-selling
techniques for their development and understanding such elements opted by the enterprise
Through incentives and rewarding method, creation of better relationship with clients can be
gained by Homebase which can lead organisation toward the consumer lifetime value. Therefore,
managing proper management of value among customer is essential for an organisation like
Homebase for meeting the desired outcome and expansion in business in ideal way.
CONCLUSION
This can state from the above mentioned report that company can manage the clients and
their opinions through perceiving value wit the purpose of delivering money in order to make the
business more powerful. Consumer values means the evaluation of distinct among entire worker
and benefits cost products. Consumer satisfaction can refer to the a individual indulgence or
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disappointment after the outcome of a person. The processes of segmentation, positioning and
targetting are essential for an organisation in order to understand consumer aspect of an
enterprise along with several different elements. Use of different techniques of marketing is
required for the organisation which can help one organisation in various ways. This is required
for an organisation to manage effective relationship with their clients through which one can
meet their desired outcome and create a unique value of brand among clients.
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