Unit 38: Customer Value Management assignment sample BTEC-HND-Level 4 & 5

Course: Pearson BTEC Levels 4 and 5 Higher Nationals in Business

The Customer Value Management (CVM) process is a way for businesses to assess and manage customer loyalty. It involves analyzing how customers interact with an organization, both past, and present, in order to identify current and future customers. This information is then used to determine whether or not rewards are needed as part of the company’s marketing strategy. Additionally, CVM can also help businesses make decisions about where to focus their resources when it comes to product development, pricing, etc.

The unit is designed to help students learn what marketers must consider in order to increase the value of customer interactions.

Organizations try to maintain a positive relationship with their customers, which often leads to increased business efficiency and success. Customers are typically happy with the results of a relationship, and it can be helpful for organizations to disseminate the following two messages: 1. Show appreciation: Customer appreciation is the sweetest reward of all. 2. Celebrate successes: Share with customers their accomplishments and achievements.

Assignment solution on Customer Value Management in the UK

Customer Value Management is a strategy that some executives use to rank customer satisfaction and satisfaction with the goods and services they have been provided by a company. The ranking system may be in the form of general or specific categories. When used in conjunction with other tools, this systematic ranking helps an organization to achieve better customer service.

The idea behind Customer Value Management is to produce a unified measure of how satisfied customers are with their interactions with your company on all fronts. One way that companies can gather information from individual customers is through surveys filled out online or over the phone, while another method involves actively observing whether people seem happy about their interactions (e.g., smiles) at various stages during a shopping trip in-store and waiting patiently for customers to finish their conversations with sales associates.

Learning Outcomes

By the end of this unit a student will be able to:

Demonstrate an understanding of the concept of customer lifetime value, how to calculate it, and the different factors that influence it

Customer Lifetime Value is the amount of money that a company can expect to receive from a customer over his or her lifetime. To calculate it, you multiply the average amount of purchases per year by the number of years for which these purchases are expected to continue.

For example, if an individual averages 50 purchases per year and they will make these 50 purchases annually for 25 years, then their lifetime customer value would be 2500 dollars ($50*25 = $2500).

There are two major factors that influence how much money a firm expects to earn over a customer’s lifetime:

• How much money per purchase they spend.
• How many visits they make each year.

Both are calculated together below in order to come up with this total revenue over the customer’s lifetime.

Evaluate the different segments in a customer base and the appropriate opportunities for customer value creation

It is important to evaluate your customers on 3 levels of segmentation.

• The first level involves understanding the customer from their perspective, including the challenges faced and the value sought.
• The second level includes identifying opportunities for interactions that lead to deeper connections such as data-driven customer service, proactive communication with notifications or promotions including enhanced delivery options.
• The third and final point involves offering exclusively curated content that you believe will be of interest – which may include discounts, appetizing offers, etc. But most importantly it means treating customers differently based on what they would like in order to meet a certain need or criteria (such as wanting only recipes without animal ingredients).

The opportunity in front of these segments differs because of varying needs and wants. This article presents research from a recent study conducted by Nielsen to assess how vulnerable customers are for switching brands in terms of value creation effort.

Analyze appropriate techniques and methods in order to increase the customer lifetime value

Making a customer more loyal to your product/service is the best way to increase lifetime value.

Loyal customers are typically less price-sensitive and react better to promotions. Additionally, they have much higher conversion rates than occasional buyers, which means they lead the pack in how you spend your marketing budget. Incorporating reward programs like loyalty cards and discounts is a good way of incentivizing repeat purchases as well as increasing sign-ups on websites. Offering personalized services tailored for preferences can also leave clients feeling satisfied with their purchase even if it does end up costing slightly more than an off-the-shelf product or service, leading them to stay loyal longer before looking for another deal elsewhere.

As the purchasing dynamic changes so do your role as a customer value manager. Today, customers are more aware of pricing and quality than ever before and there is no longer a simple formula for success.

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