The customer lifecycle in a digital environment

GDS Modellica

The digital customer lifecycle is no longer linear and is now a much more complex experience

In the digital environment, the customer continues to be the focal point around which all business strategies revolve

The “customer lifecycle” is the term given to the different stages followed by a customer when they interact with a brand, product or service, from the very first contact until they buy a product or service and even beyond.

In the digital age, this purchasing process is no longer linear and has instead transformed into a more complex experience. This is because customers are increasingly more informed, have greater expectations, want faster service and have a vast range of channels that they can use to interact with a product, brand or service. Customers now have access to a varied multichannel experience that encompasses not just physical shops but social networks and other digital channels (websites, e-mail, price comparison sites, search engines, etc.), and they can do this using multiple devices, even changing at will during the purchasing process. A report by KPMG entitled Consumers and the New Reality examines the impact of the pandemic regarding the preferences and expectations of increasingly digital consumers who are concerned about the economy, sustainability and health safety.

There is no single customer lifecycle model and the stages of a purchase have no fixed duration nor follow a specific order. There are various different access channels, but they are used interchangeably, and whilst each customer follows a path, they are not always the same. However, although they are not all necessary, the main stages of the customer lifecycle can be best summarised as: desire/need, research, comparison, selection, purchase, experience, retention and recommendation.

Customer lifecycle management is a vital process for companies looking to perform well. This means that they need to pay close attention to the detail of each individual process and task, assign appropriate personnel, monitor processes and carry out an appropriate follow-up with the customer. Most of all, they will need the right technology. One example is the GDS MODELLICA Behavior Engine (MBE), a software application from GDS Modellica designed to help manage account or customer portfolios for increased revenue and implement powerful segmentation campaigns without losing sight of the principles of sensible risk management. MBE provides customer management tools for all types of product, whether it be credit cards, personal loans or overdrafts, and it covers a complete range of functionalities, including credit limit management, prior approvals, attrition and marketing (up-selling/cross-selling or pre-collection). It is also capable of managing exceeded limits, late payments and exposure through powerful machine learning, Big Data and other data-based strategies.

GDS Modellica particularly highlights that MBE “assesses the borrower’s credit relationship based previous behaviour and predictive information from that person or SME’s interactions with the business as a whole, instead of making decisions solely on the basis of a single interaction. The system periodically identifies a line of total credit to be extended to an account or borrower and makes it possible to manage limits and lines for each product”. Therefore, by implementing intelligent credit line management strategies, a company can increase profits by enhancing the purchasing power of its best customers whilst limiting the exposure of those with greater risk. At the same time, the bank can carry out on-demand limit increases in real time, thereby increasing revenue and customer satisfaction by minimising the number of manual operations required at the point of sale.

Just as in the analogue environment, the customer is the main focus. Analysing their individual behaviour patterns makes it possible to anticipate and identify their needs, outline appropriate strategies and offer hyper-personalised services. It is more important than ever for companies to learn how to adapt to new ways of engaging and interacting with the customer in order to strengthen their businesses, and being able to count on the correct strategies and analysis will ensure that companies move in a profitable direction.

Businesses, brands and other organisations are all conscious of the value that customers provide through their digital interactions. Each time a consumer interacts digitally with a company, they tell us more about their preferences and attitudes, and this information is valuable in order to learn more about the customer, consolidate the customer relationship, optimise the user experience, and, ultimately, increase sales and customer loyalty. Active listening is a key part of creating, managing and improving the customer’s digital multichannel experience, where the customer is the focal point around which all strategies revolve and the end goal is to increase sales, loyalty and also recommendations.