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Customer Management - Homebase

University: UK College of Business and Computing

  • Unit No: 9
  • Level: Undergraduate/College
  • Pages: 6 / Words 1467
  • Paper Type: Assignment
  • Course Code: M/508/9862
  • Downloads: 654
Question :

The objective of this report is to evaluate customer value management practices that can assist in attaining desired goals and objective of firm easily. In this regard, firm requires to pay their maximum attention towards customer value management strategies as:

  • Evaluate the concept of customer lifetime value, its calculation methods as well as the influence of different factors upon Homebase company.
  • Identify several segments in the customer base as well as specific opportunities incorporated for customer value creation in Homebase company.
  • Discuss specific methods and techniques that can assist to increase customer lifetime value.
Answer :
Organization Selected : Homebase Company


Customer value management is the process to increase customer’s value individually. It defines how the organisation work and communicate with customers. The customer value management is defined as how to increase their customers and how to communicate with them. Homebase company provide service through emails and SMS they increase the highest customers and more than attract with SMS according to emails and other communications procedures. It report includes various components that determine the calculations of customers value management and benefits as well as factors that influence the customer's lifetime value (Christopher, 2016.). It also includes the B2B and B2C decision making model plus defines the opportunities and demonstrates the possibility of customers value creation and techniques and methods that increase customers relationship.


P1 Various components that calculate the customer's lifetime value:

Customer lifetime value is the most important metric to understand our customers. It helps to make important business decisions about the marketing, products, development about the sales and customers support. In marketing, CLV helps to understand the needs of customers. In products, CLV help to define what service or product offers to customers. Customers support defines how the organisation retains customers. And sales determine what kind of customers need to acquire. When calculates the customer's lifetime value, there are many numrious to consider on the specific equations for the answers. Most straightforward way to calculate CLV to take revenue and earn form customers and subtracts the money spent and serving them. To calculates the CLV time periods each of these serves different purpose. CLV is the most powerful to understand what customers worth to you now. Homebase organisation mainly calculates their customers sales. Company mainly communicate with their customers via emails and SMS and their profit depends on their communication with the customers.

Components of customer's life value- Mainly, Homebase is home improvement company that provide services customers to home decorates, outdoor living, garden, kitchen equipment, lighting & electronic, bathroom's and plumbing, paint &decorates or storages & home appliance. Company provide their customers to products in retails price (Cooper, 2017). Homebase have long termed customers they calculate their sales in the form in formulas.

Calculates the customer's lifetime value- when calculating CLV the most straightforward ideas is to examine the rates and what the management of customers in \organisation and also understand the which is customers is long time in the organisations and which is not.

  • Estimate customer's lifetime value- CLV analyses the organisation consuming power. The value of average order at business. Is $50 and 10% of chance of coming back and coming a repeat purchase. And the finally assume that it costs $15 to acquire each new customers. The total revenue can expect to get from each customer is average value divided by one minus the repeat purchase rate $50/ (1-0.1) = $55.56 and subtract customers acquisition cost from that and get a customer lifetime value of $40.56.
  • Predicted customer's lifetime value- Each of those calculations serves different purpose. Predictive CLV is the most powerful way to understand the customer and there value change over time. For example – in the e-commerce industry, benchmark data from nearly 200 commerce companies. In the chart defines the most basic form of customers value lifetime. Is defines the single input, sum of all purchases and closed time parameters, 365 days. On day one, customers with the highest lifetime values have already defines themselves (Fitzroy and et.al., 2016). This means market and organisation don't need to take long make decisions about their marketing . CLV is the best metric to predict future customers behaviours.

P2 Benefits of customer's lifetime value to the organisation

The customer's lifetime values benefits define the amount of profit to make one customer when purchased goods and service over their lifetime. In business when organisation does marketing, they first focus on retaining customers and upping their purchase level. In Homebase they mainly worked to retain their customers in long time they communicate each customers to via SMS and they inform to new products and service and about the offers as well.

Benefits of customers lifetime value to the context of organisation-

  • Saving money-In the CLV organisations invest lots of money to attract customers to their organisations they give advertisement to the television, radio, newspapers and social media to find new customers. This is cheap to retain old customers and find new ones. This is full west of money idea (Flint and Woodruff, 2014). Homebase is mainly retained their customers to long time. Company don't west their time and money to gives ads on channels and they only send emails and SMS to their customers to inform about their products and offers. It increases company communication with customer's and customers also timely notify the company activities and service.
  • Better marketing- Homebase has one of the main benefits of marketing their products. They are mainly marketing their products vis sales man and marketing to send their customers via emails or SMS. But mainly, customers attract with SMS to more than emails and other marketing techniques. Benefits to send SMS to the customers knowing about all the products and service and offers what company gives in their products like 50% sale on home decorates, 20% sales on garden etc.
  • Encourage brand loyalty- To regular contact with customers Homebase increase their brand loyalty customers use their products and they knew the quality of the products they serve to the customer's. After that, customers are regularly buying those brand products. tthose customers become more loyal to companies brand they also talk about to other person about the quality of the products.
  • Gain more sales- Homebase In sales department already know about the customers regular contact. So, the company send their customers to the latest prodcuts with persuasive call to location. For new customers, company only send them simple SMS to promote and thank you note with message.
  • Save Time- Homebase company mainly Connecting to the loyal customer and concentrating on target market. Company saves time and money to do not invet money on other advertisement on social media or other social sites. Homebase mainly contacting their new customers to do promotion of their business and also retain their old customers (Goetsch and Davis, 2014 ).
  • Return investment- Every company have limited resources and organisation want customers bring them maximum profit. Customer's lifetime value determines how the retaining customers to maximize return on investment.

P3 Factor that influence customers lifetime value:

Factors are determines the organisation value and about their products and company profiles it also defines the what products you want to sell and what kind of companies services level. Homebase Company mainly defines the how to retain customer long time. Organisation’s main strategy is to communicate with their customers daily. In this factor defines company what types of products sell and what kinds of service provide to their customers. Homebase also handles the market stability and company objectives. There are factors that influence customer’s lifetime value-

  • Products you sell- This factors determines what products company sell and their life longer to use. Homebase is mainly provided the quality products to the customers that's why customer's long time to purchase their products and adopts opportunities to used their products. In other hand one thing is also important that company sell thier products for suitableto customers and customers satisfied with this.
  • Service and promise levels- Homebase mainly provide the home improvement products to their customers in retail price. But they also promise the service they give is loyal and trustworthy (Kelly and et.al., 2014.). They also make sure to customers if they don't like their products they will change and return in fiture . Homebase gives warranty on their products. They also give surety card to their customers.
  • Market stability- In rapidly developed the new marketing techniques and technology it difficult to make long term relationship with customers because many customers attract with new product's technology and new marketing. Sometime, company’s old customers also go for new technologies’ products. Same as Homebase try to developed new products and new service for customers so their customers never go with their competitors.

Company objectives- Most of the organisation have strong objective to retain their customers to long-term. They set strategies to give their customers to new and advanced

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