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Customer Value Management - Homebase

University: Regent College London

  • Unit No: 8
  • Level: Diploma
  • Pages: 5 / Words 1208
  • Paper Type: Dissertation
  • Course Code: JNB517
  • Downloads: 892
Question :

The scenario of this report determines rewards of SMS communication approaches which are taken by Homebase by initiating such a campaign. These kinds of practices assist them to develop a direct connection with target customers. Effectiveness of SMS communications was analyzed by identifying the desired uplift in the incremental sale of firm.

  • Provide a clear understanding of customer lifetime value for Homebase and analyze the impact of a different factor over it as well as how it can be calculated.
  • Critically analyze different opportunities for customer value creation as well as crucial segments of the customer base for Homebase.
  • Determine numerous methods that can be implemented by Homebase in order to enhance the customer’s lifetime value.
Answer :
Organization Selected : Homebase


Customers are the ultimate one whom used to support and enhance an organisation goodwill. Thus, a firm need to value their users aspects properly so that better and signified outcome could be drawn (Hammer, 2015). Customer value management is a process where a business should focus on working so that they become able to manage values and attribute of their signified users. This project is based on Homebase whom engage in working over on improving home retailer and garden center. In this project certain number of things will get included which define about customer lifetime value with its calculation with factors which influence it. Along with this, it will also going to define about various segments in customer base. Further it will also signify about techniques and methods to enhance customer lifetime value.


P1 Analyse various components that enable an organisation to demonstrate about customer lifetime value

Customer lifetime value is define as prediction of net profit attributed to entire future relationship with users (Hollensen, 2015). A business need to assess and understand about various components of CLM so that better and effective working could be done. There is a need to understand about customer lifetime value properly so that better and effective working and profitability could be maintain and manage. Homebase is one of a major home enhancing retailer and garden centre with appropriate components which enable an organisation to demonstrate about CLV:

  • Present value: One of a major thing which need to understand by Homebase is present value of their customers. Here, they need to understand the attribute of their clients so that better and effective working could be done which facilitate beneficial outcome in nature.
  • Mathematical formula: Homebase experts define customer lifetime value as a monetary price which got estimated by consulting a mathematical formula. This get estimated by a company by dividing total revenue with number of customer joined an organisation. This enable in defining and analysing things better and in appropriate frame as well.
  • Customer’s loyalty: Customer lifetime value could be maintain and manage through customer loyalty which could be estimated through providing appropriate discount and vouchers. Homebase could gain better customer loyalty with repeat visit so that better lifetime value could be created.
  • Individualized CLV: Business have to determine certain number of things in better and signified manner (Kerzner and Kerzner, 2017). For a company it is really essential to organise and determine lifetime value on individual frame not on broad basis. This individualise customer lifetime value enable and support Homebase to analyse each and every person more properly so that they could maintain CLV in a better and signified frame of reference.
  • Cohort analysis: Cohort indicates a group of individuals who share same characteristics. This indicates various situations that affect CLV to create and maintain healthy relations with customers. Homebase need to identify all such individuals and customers which have similar cohort so that they could maintain and manage their better and signified working which further enable in accomplishing targets.

Such components enable Homebase to evaluate customer lifetime value which support in managing things better and in proper frame so that effective and efficient outcome for a business could be drawn.

P2 Benefits to customer lifetime value to an organisation

Customer lifetime value enable and support a business to grow and expand themselves. This enable them in attempting more profit so that better and supportive outcome could be drawn (Kim and et. al., 2015). Thus, for a business it is really essential to understand about customer lifetime value to Homebase so that better and effective outcome could be drawn. Below are certain merit for CLV for Homebase which need to understand by managers so that effectiveness and efficiency could be maintain:

  • Support in managing goodwill: Customer lifetime value enable and support in managing goodwill of a company. A business could gain benefit and sustain in an environment by providing better products at keen competitive world. Although, lifetime value also facilitate a good relationship with users so that chances of deriving effective and suitable outcome could become possible. Homebase could gain and enhance their goodwill only when they provide and deliver right quality products. Thus, for managing goodwill for a company it is really essential to craft a better and signified thing in a define manner.
  • Support in scalability: Customer lifetime value also enables in scaling the operations at multiple frame. Business need to understand the stances in better and effective manner where if values could be maintain and manage in better frame then it will craft a profitability for an association. Homebase could expand themselves properly when they start respecting about users which further provide benefits in scaling up operations.
  • Support in enhancing profit: A business ultimately want higher profit and consideration in return (Kotler, 2015). A profit could be gain through satisfying customer and their loyalty as well. A business need to understand such thing and required to maintain their customer lifetime value so that business could be maintain and manage better as well as enhancement of profit could be done. This will get understand by managing relationship with clients and define as ultimate benefit through CLVM.
  • Enable in retain customer: A customer lifetime value provide benefit in terms of retaining customer and users. It is really essential for a business to retain their users by providing appropriate discount and vouchers so that better effectiveness and efficiency could be maintain and manage. Homebase need to understand this benefit provided by CLVM so that they could retain maximum individuals by providing effective and better services.

P3 Factors that influence the customer lifetime value

A business could be operated in two context where one stands for business to business and another one is business to consumers (Kotler, 2017). It is really essential to understand such attribute by managers of an organisation so that chances of influences could be minimise. Like in business to business, products need to be more creative in frame otherwise it used to restrict a firm to again deal with such organisation. Homebase are one of a major retail shop whom have suppliers in differ parts of the world. Thus, if suppliers will not going to deliver quality products then it impacted on Homebase profitability as thus their value of lifetime get influence and thus shift used to take place.

Similar thing used to take place in business to consumer segment. Here, consumers are define and determine as ultimate god and management need to focus on all needs and wants of them. One of a major factor which used to influence customer lifetime value is lack of inappropriate

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