- Components to calculate the value to the customers.
- Description of the benefits to the value.
- Factors that influence the customer lifetime value.
Customer value management is a term which referred as an act of having increment in customer value individually. They are the important part of the enterprise and they used to play crucial role in terms to having increment in the profitability and productivity of entity. They need to be considered as blood and soul of enterprise (Christopher, 2016). In this way, enterprise need to cope up with the needs and demand so that they can be attract towards the working of firm. The present report has outlined the activities of Home base enterprise, it works in the manner as small medium enterprise, which working as broadcasting. In addition to this, there will be discussing of various factors which determine the impact on lifetime value of customer. The assignment will be inclusive of things as are differed kind of business models, methods to increase customer relationship, market segments etc. The main aim of this report is to have enhancement in customers satisfaction.
LO1 P1 Description on various components which enables working of enterprise to calculate customer lifetime value.
Customers are backbone to the enterprise. Without their present enterprise cannot able to have long-term sustainability. They play valuable role in order to creation of organisation. It helps the company to gain better profitability and productivity. In addition to this, to have sustainable operation it is very important to satisfied the customer. For this they need to identify their demand in market. In this term it can be said that customer's lifetime value is the thing which is standard measurement and it is helpful to know net profit of firm from particular individuals. In this way, it can be said that customer lifetime value will be calculated by having reduction in the cost of providing service to the customer (Di Benedetto and Kim, 2016). In this term it will be inclusive of the amount of expenses which is been made on the customer with the help of the amount of the profit gained from the individual customer. Moreover, it is very important to determine the value of the customer to the enterprise so that there can be creation of effective relationship with them. It will be inclusive of the amount of the expenditure made on the customer. It can be determine effectively with the comparison of benefit gained by him on the week basis. In addition to this, it can be said that it is very helpful for the enterprise to gain better productivity which helps the enterprise to avoid the expenses on the advertising process. This kind of things may affect the performance of enterprise in adverse manner. The firm needs to take various measures which will help the firm to identify the suitable measures so that their need can met. There are number of ways to determine customer lifetime value as-
Average revenue per user- it is very useful for enterprise to determine its average profit of the customer on the basis of month and then it is need to be multiplied with 12 or 24 to get annual CLV of Home-base.
Cohort analysis- It will be inclusive of the number of the factor which works as to changes and this is need to be occur in term to enterprise during the time (Christopher, 2016). Thus, it can be said that it is one of the effective analysis which work as to identify the requirement of customers with the time. It is based on the various factors as are changes in market condition, seasonality and preferences of customers.
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Individualized- This measurement is very helpful in relation to identify the total value which has been created by the customer with the help of channels, campaign and another kind of mediums as are coupon etc. It will be inclusive of the things as are digital marketing and social media, this both are effective medium in order to identify the best resources to the enterprise.
P2 Description on the benefits of customer lifetime value to the enterprise
In this it can be said that the approach of CLV is having large imp.
Consumer purchasing- The purchasing capacity of customer plays the essential role in terms to have deep and significant effect on the operation function of working enterprise. In this term it can be said that the consumer will purchase the good and service from the enterprise only the time it helps to meet the requirement of customer in significant manner. In addition to this. It helps the company to identify the suitable purchasing power of the customer's (Doligalski, 2014).
Customer Loyalty- In this term it can be said that customer loyalty plays the crucial role in terms to have sustainable operation in the enterprise. The loyal customer are assets to the enterprise as they are helpful to enhance the profitability.
Service by company- The services and products which are produce by the firm leave the greater impact on the process of enterprise. In this term it can be said that the customer will help the firm to have increment in the profitability of firm and take initiative to create the better customer lifetime value.
M1 Define the concept of customer life time value in context of B2B and B2C.
The CLV causes the organization to pick up a superior thought of the purchaser's prerequisites and therefore take the proper measures to meet them in an exceptionally compelling way. The procedure is profoundly in view of the accumulation of the shopper information that causes the organization to make the appropriate measures. The procedure of CLV encourages the organization to have a superior offer of the income for B2C or B2B organizations. While in the B2B, the organizations collaborate with each other to pick up a superior efficiency. Then again, In B2C, the cooperation between a business and the customer's occur that causes the organization to pick up a superior offer of market. The B2B is the framework in which the organization or a business deals the administrations or the items to different business. While in the B2C, the business or the organization give its administrations to the customer's.
LO 2 P4 Define the types of market segmentation strategies.
The strategies to the firm are need to be framed in effective manner. It derived as systematic plan of action. In this it is very important to develop the product and service effective so that firm can run their operation effectively. Before, making it firm need to get assure with the requirement of the customer's. In this term, it can be said that it is very helpful for the firm to use this market segmentation strategies which are defined in following manner as are-
Geographic segmentation- It is inclusive of the practice in term to develop the market on the basis as geographical location. Under this firm need to cater the customer as per the locality or region. In this way it can be said that firms need to take the suitable measures to cater the needs of customers (Frow, Reisman and Payne, 2015).
Demographic segmentation- under this customer are need to be segmented in terms to the number of factors as are status, religion, race and occupation etc. It is very helpful for the firm to plan the better and effective services.
Behavioural segmentation- it is the term which is largely based on the attitude of buyer towards the enterprise. It is very helpful for the firm to have increment in the knowledge of entity in terms to the product and services so that effective usage of things can be done.
P5 Describing the term as B2B and B2C decsion making models.
In this it can be said that the decision making model of B2B and B2C will be helpful for the enterprise to meet the need of customers (Chacour and Ulaga, 2015). In this term it can be said theta the decision making process will be helpful fort the enterprise to meet the basic requirement of the enterprise. In this way, it can be determine as that B2C approach will only focus over the sales and marketing departments. Thus, it can be said that the B2B approach will be inclusive of the things as are HR, sales,
M2 Description on the segmentation model of B2B and B2C.
It is critical for organizations like Home base to section their customer's as it gives advertisers to get precise photo of their administration customer's. There are models for B2C regions and they are as per the following:
Division in view of need: There are numerous organizations around the globe that convey their customer's with comparative arrangement of items and administrations. Firms that can comprehend the necessities in powerful way can achieve their objectives and destinations. For this reason, business needs to lead time to time statistical surveying with the goal that necessities and prerequisites can be distinguished. Further, custom's esteem is made, at that point appropriate look after their inclinations and the issues that are looked by them are considered.
Further, for division model of B2B are additionally essential for recognizing people as their customers. Beneath given is the model:
Needs: This is a kind of plan that empowers to sort benefit customer's in view of needs, wanted results or comparative needs. This is profoundly successful for customer's like encouraging low exertion associations or lessening protests. Customer's can create positive observation inside their mind when every one of the issues that are looked by them are considered.
LO3 P6 Define the techniques and methods which helps the enterprise to have enhancement in customer loyalty and relationship.
There are number of techniques and method which are need to be applied by the companies in order to enhance the customer relationship and loyalty. In this term firm is able to enhancing the profitability of the enterprise (Chacour and Ulaga, 2015). In order to attend the desire goals the effective services are need to be delivered to the customers. In addition to this, customer will take the products what they like the most. They are having the number of expectation in terms to product and services in the market. There are some techniques which helps to maintain the customer loyalty as are-
Consideration over measurement of customer satisfaction- It is very helpful for the enterprise yo know the taste and preferences. In this term it can be said that when the rate of satisfaction are low than purchasing rate of the product will also get low. In this way Home-base need to conduct the effective survey.
Skilled worker: It is fundamental that every one need to focus over inside the business need to think about the sort of parts and duties that must be played by them. When they are not ready to play out their parts with full productivity, at that point it has negative effect over the business. Representatives are the substance of firm as they have coordinate association with customers (Beckers, Risselada and Verhoef, 2014). Appropriate preparing ought to be conveyed by considering the regions in which they need.
Customer's Retention: Customers who definitely think about the items and administrations can without much of a stretch be pulled in when the issues that they were confronting are appropriately considered. Business need to make suitable strides in which criticism ought to be taken so they can decide the issues that were looked by them . Along these lines, solid connection and customer's dependability can be raised.