Republic of the Philippines

Department of Education SHS

Region V
Division of Sorsogon
PRINCIPLES OF MARKETING
Quarter 3, LAS 3, Week 3
Customers Value
Name of Student: __________________________________________________
Learning Area-Grade Level: ________________________________________
Date: _________________________________________

I. Introductory Concept

Another way for the companies to remain competitive is to provide superior customer service. This is
the essence in relationship marketing: a company build customer loyalty by making customer satisfaction
its top priority.

II. Learning Competencies

Explain the value of customers (ABM_PM11-Icd-6)

After going through this Learning Activity Sheet, you are expected to:
 Identify the levels of customer value;
 Give examples of relationship development strategies and
 Determine the Customer Lifetime Value (CVL) in a particular situation

III. Activities

A. LET US REVIEW

Exercise 1. Pre-test
Directions: Read each statement carefully. In a separate sheet of paper, write TRUE if the statement
is correct and FALSE if the statement does not fit the description.
_____1. Customer service is the process of ensuring customer satisfaction with a product or service.
_____2. Customer Relationship Management can take on many forms-salespersons assistance, product
delivery, technical advice, help desks, or other means.
_____3. Customer service is a process of managing an organization’s interactions with current and
future customers.
_____4. Relationship marketing is the process of building and maintaining profitable customer relationship by
delivering superior customer value and satisfaction, thus ensuring brand loyalty .
_____5. Maintaining high levels of customer service quality may be challenging due to variability of services.

B. LET US STUDY

Customer Value is defined as the satisfaction derived from what a customer may experience or expect
to experience by choosing a particular action to relative to the cost of that action.

Level of Customer Value

The level of customer value indicate what the consumers expect and do not expect from their purchase decision.
1. Basic and expected level- This level includes the basic requirement of conducting a business. For
instance, restaurant are expected to have a specious dining area and clean tables and utensils. If these
requirements are not met by the business, it cannot provide high-quality customer value.
2. Desired customer value- this involves what the customers want from the purchase or service experience.
3. Unanticipated customer value- it pertains to an unexpected purchase or service experience that may go
beyond what the customers desires.
Relationship Development Strategies

Recent research has shown that loyal customers prove to be more profitable than ordinary customers. This is the
reason why companies are challenged to maintain customer loyalty. Companies should practice the following
development strategies to retain loyal customers.
1. Communicate with customers frequently and effectively.
2. Offer customer rewards
3. Conduct special events and provide sponsorship
4. Enhance customer service
5. Utilize languages to reach a wider customer base.

Customer Service in the Philippine Enterprise

The success of our homegrown companies lies not just on their offerings but also on their customer service. Local
businesses now utilize customer service tools that fit our customer-oriented culture and extensive technology usage.
Most companies provide a customer hotline that customers can call for inquires, concerns, and technical support.

1. Email and SMS help businesses communicate with their clientele more easily and most consumer regularly
check their inboxes.
2. Social Networking site, aside from their primary function of connecting people, have become a channel for
netizens to ask for customer support.
3. Live Chat support facilitate real-time correspondence between the customer and the company representative.

Given the amount of time people spend on using smart phones, companies know that creating mobile
applications increase their visibility and provides value to the customers.

Customer Lifetime Value

Customer Lifetime Value (CVL) is the forecasted sales or profits that a company can derive from the entire
span of its future relationship with a particular customer.
A customer’s lifetime value can be based upon the potential and profitability of his/her relationship with the
company.

The CVL perspective has several distinct implications:

 It considers a longer-term perspective of a company’s relationship with customers in contrast to a short-term
view of “take the customer’s money and run.”
 It calculates and compares costs of acquiring customers and keeping old ones. This can be used to determine
the revenues that are lost when an existing customer switches to another product. Costs for getting new
customers are called acquisition costs, whereas, cost for maintaining existing customers are called retention
costs. These are normally in the form of customer support and promotional incentives.
 It highlights the importance of market segmentation, with the recognition that some customer groups are
more profitable than others.

CVL can be measured using the formula:

CVL= (PV) (RP) (RT)
Where: PV is the average peso value of a sale to a particular customer or customer group
RP is the repeat purchase in a year
RT is the retention time in months or years
CVL is the customer lifetime value

For example, an athlete who spends ₱2,000.00 for every visit to a spa and goes to the spa twice a month for an
expected time period of five years would have a CVL computed as:
 Let PV = ₱2,000.00
RP = 24 (twice a month for 1 year)
RT = 5
CVL =?
CVL = (PV) (RP) (RT)
= (2000) (24) (5)
= ₱240.000.00
The athlete’s Customer Lifetime Value is ₱240,000.00

C. LET US PRACTICE

Exercise 2. Read each statement below carefully. Write TRUE on the line if you think a statement it True. Write
FALSE on the line if you think the statement is False.
_______1. Advertising and marketing are the same thing.
_______2. Regular customers are all brand loyal.
_______3. A transaction consists of a trade of values between two parties.
_______4. The key to successful customer retention is customer satisfaction.
_______5. Marketing plays an essential role in creating customer satisfaction.

D. LET US REMEMBER

 Customer value is the satisfaction felt by a customer immediately after making a purchase relative to what
has actually been given up to receive them.
 The level of customer value are basic and expected levels, desired customer value, and unanticipated
customer value.
 Companies should practice the following development strategies to retain loyal customers:
Communicating with customers frequently and effectively, offering customer rewards, conducting special
events and provide sponsorship, enhancing customer service, utilizing languages to reach a wider
customer base.

E. LET US APPRECIATE

Exercise 3: Directions: Analyze and answer the question briefly. Write your answer on extra sheet of paper.
1. What is customer value to you? Narrate a personal experience using the level of customer value.
2. Explain briefly the relationship development strategies by giving examples.

F. EVALUATION

Exercise 4: Customer Lifetime Value

Direction: In a separate sheet of paper, compute the CVL for the following situation.
Follow the guide provided below. (5 points each)
1. Mrs. Abad spends ₱4,000.00 for every visit to a supermarket twice a month for an expected time period of
five years.
2. Mr. Alfonso spends ₱1,500.00 for every visit to a fast food chain with his wife and 2 children once a month
for an expected time period of one year.
3. A senior high school student spends ₱500.00 for every visit in a bookstore once every 3 months for an
expected time of 9 months.
4. An overseas Filipino Worker from Dubai spends ₱3,000.00 for every package she sends to the Philippines via
courier service once a year for an expected time period of three years.

PV = ________
RP = ________
RT = ________
Computation:
CVL = _______
 IV. Rubrics for Scoring: Exercise 3

5 points The answer is well-written, organized and the idea is very relevant to the question and has
no grammatical or spelling errors.
4 points The answer is fairly written, and the idea is almost relevant to the question and has one
grammatical or spelling error.
3 points The answer is somewhat relevant to the questions and has two to three grammatical or
spelling errors.
2 points The answer is unclear and has four grammatical or spelling errors.
1 point The answer does not address the question and has more than five grammatical or spelling
errors.

V. Answer Key

Exercise 1 Exercise 2 Exercise 4

1. TRUE 1. FALSE Exercise 3. Students’ response will
1. P 480,000
2. FALSE 2. FALSE vary.
2. P18,000
3. FALSE 3. TRUE
3. P1,200
4. TRUE 4. TRUE
4. P9,000
5. TRUE 5. TRUE

VI. References

Real C. So, Oscar G. torres. 2016. "Customer lifetime value." In Principles of Marketing-Textbook, by Oscar G. torres
Real C. So, 21-22. Quezon City: Vibal Group Inc.
Real C. So, Oscar G. Torres. 2016. "Customer Realtionship: Customer Service." In Principles of Marketing-Teachers
Manual, by Oscar G. Torres Real C. So, 13-17. Quezon City: Vibal Group Inc.
Rosalind Masterson, Nichola Phillips and David Pickton. 2020. "Student Resources." Sage Publishing. Accessed
September 2, 2021. https://study.sagepub.com/masterson4e/student-resources/chapter-1/multiple-choice-quiz.
Zarate, Cynthia A. 2017. "Relationship Marketing." In Principles of Marketing for Senior High School, by Cynthia A.
Zarate, 33-40. Quezon City: C&E Publishing Inc.

Prepared by: Validated by:

JOCIL MERALPES NAVARRETE DAISY G. ERESTAIN

Gallanosa National High School Casiguran Technical Vocational School

JESSICA B. LIM
Bulan National High School