Higher Nationals
Assignment Brief – BTEC (RQF)
Higher National Diploma in Business
Customer Value Management
, P1 Explain and analyse the various components that enable an organisation to determine and
calculate a customer’s lifetime value.
Answer: Determining and calculating a customer’s lifetime value helps to predict the value of
organization’s relationship with its customers. It’s a primary tool to understand firm’s customers,
these tools help an organization to evaluate the future value, which would be generated from
market readiness to embark on bold new ventures. (Venkatesan, Bohling, Beckmann, &
Venkatesan, 2008) stated that customer management activities help an organization to make
more consistent and effective future decisions and the same is done by Walmart. It helps an
organization to design and develop its segmentation, what customer an organization should
target. It also helps to forecast resources, how much resources they should allocate to targeted
customers. Selection of customers who would contribute to their future profitability and help to
develop and help grow future inflows.
Walmart keeps track on its customer data and information. Walmart knows the preferences of its
customers. It knows most demanded brands and items by determining its customers, this
embedded knowledge helps Walmart to strategies itself and make new policies (Venkatesan,
Bohling, Beckmann, & Venkatesan, 2008).
P2 Explain and justify the benefits of customer lifetime value to an organisation.
Answer: (Gupta & Zeithaml, 2006) witnessed a significant relationship between several
customer care indicators with profitability. Improving the satisfaction level of the customer has a
positive impact on firm’s profitability at Walmart. Study also found that product or service
quality determines a firm’s profitability, if firm offers a quality goods and services experiences
increase in their profitability.
Improvement in a Walmart’s profitability heavily depends on a production of Walmart’s’
services; profitability not only helps an organization to sustain in a new hyper competitive edge;
but also helps to retain its customers by improving the quality of end products or services.
(Petersen, 2015) Stated that CLV (customer lifetime value) helps an organization in multiple
ways such as one of the largest asset for the firm, CLV allows a business to exact figure for the
Assignment Brief – BTEC (RQF)
Higher National Diploma in Business
Customer Value Management
, P1 Explain and analyse the various components that enable an organisation to determine and
calculate a customer’s lifetime value.
Answer: Determining and calculating a customer’s lifetime value helps to predict the value of
organization’s relationship with its customers. It’s a primary tool to understand firm’s customers,
these tools help an organization to evaluate the future value, which would be generated from
market readiness to embark on bold new ventures. (Venkatesan, Bohling, Beckmann, &
Venkatesan, 2008) stated that customer management activities help an organization to make
more consistent and effective future decisions and the same is done by Walmart. It helps an
organization to design and develop its segmentation, what customer an organization should
target. It also helps to forecast resources, how much resources they should allocate to targeted
customers. Selection of customers who would contribute to their future profitability and help to
develop and help grow future inflows.
Walmart keeps track on its customer data and information. Walmart knows the preferences of its
customers. It knows most demanded brands and items by determining its customers, this
embedded knowledge helps Walmart to strategies itself and make new policies (Venkatesan,
Bohling, Beckmann, & Venkatesan, 2008).
P2 Explain and justify the benefits of customer lifetime value to an organisation.
Answer: (Gupta & Zeithaml, 2006) witnessed a significant relationship between several
customer care indicators with profitability. Improving the satisfaction level of the customer has a
positive impact on firm’s profitability at Walmart. Study also found that product or service
quality determines a firm’s profitability, if firm offers a quality goods and services experiences
increase in their profitability.
Improvement in a Walmart’s profitability heavily depends on a production of Walmart’s’
services; profitability not only helps an organization to sustain in a new hyper competitive edge;
but also helps to retain its customers by improving the quality of end products or services.
(Petersen, 2015) Stated that CLV (customer lifetime value) helps an organization in multiple
ways such as one of the largest asset for the firm, CLV allows a business to exact figure for the
