LO1: Demonstrate an understanding of the concept of customer lifetime value; how to calculate it and the different factors that influence it.

Unit 38: Customer Value Management

Introduction:

This unit is designed to enhance students’ knowledge and understanding of why it is important for marketers to enhance and manage the value of the customer interactions. Students will learn the underpinning theories and frameworks, and will also be expected to relate these to real-world examples, including their own personal experiences. Organisations ideally seek a mutually beneficial relationship between themselves and their customers. This is particularly important when considering the costs associated with acquiring a new customer. It has been suggested that it can cost five times as much to gain a new customer as it is to retain an existing one. Moreover, there is no guarantee that a new customer will be as loyal as a current one. Any organisation, whether for profit, NGO or a charity, seeks ways of retaining customers through enhanced customer experiences. In order to retain loyal (and profitable) customers, organisations seek to understand them better. By understanding customers through the capture of relevant data, organisations can enhance a customer’s lifetime value. They then aim to build a relationship with the customers where they remain loyal and continue to purchase a range of products/services. The knowledge, understanding and skill sets that students will gain on successfully completing this unit will enhance their career opportunities; whether setting up in business independently or being employed by an organisation.

Part A

Learning Outcomes:

LO1: Demonstrate an understanding of the concept of customer lifetime value; how to calculate it and the different factors that influence it.

LO2: Evaluate the different segments in a customer base and the appropriate opportunities for customer value creation.

LO3: Analyse appropriate techniques and methods in order to increase customer lifetime value

Part B:

Using Netflix Plc Inc., you are now required to prepare an individual (10-minutes) presentation (with 5 minutes for questions) on techniques and methods used to increase customer lifetime value. To do so, you will be required to deliver your PowerPoint presentation accompanied with your speaker notes, on an analysis of the different techniques and methods organisations (Netflix Plc and its direct competitor Amazon Prime Video) can use to increase customer relationships and customer loyalty. You will finally have to use your own judgment to evaluate the appropriateness of methods and techniques chosen to be applied at each stage of the consumer decision-making process and Customer Lifetime Value.