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Predicting customer behaviour

A common concern of lenders is knowing where the next opportunity is coming from.

There is often a gap between strategic developments and time spent reviewing and trying to understand where to go next. This time is lost time.

This challenge often begins with a lack of understanding of who one’s customers are. Not in general terms, but specifically, questions like what are their financial needs, how do they spend their money, are they loyal to you or not?

Maintaining an in-depth view of every customer or market segment is critical and success hinges on a host of separate factors from timely new product launches to anticipating customer demand and improving existing offerings.

One of the primary factors hindering this insight is understanding the economic climate and the way this affects your customers differently. Key questions need answering. For example, if you do lend, are you putting yourself at an unnecessary risk? How does your current customer base use credit – positively or negatively? Are your current customers actually who you want – or is it just a historic accumulation which, due to changing times, has deteriorated in quality? Are they even using your product offerings, or dormant in your files?

In a highly regulated environment, it is especially important to use accurate and relevant assessments. But, if you were to combine this with having pre-identified insight into exactly who your current customers are; how they may be impacted if circumstances change – including scenarios like rising interest rates or life-term events such as births or buying a house, your decision can be a fully informed one which also looks into the future.

Which customer segments offer you the right balance of risk vs. opportunity for future / further nurturing? Are they viable, appropriate or likely to continue to offer cost-effective opportunities for you? All characteristics and scenarios should be considered to help build an accurate market profile to help you reach and retain the right customers.

Demographic profiling is one example that can help you highlight key consumer attributes. By tapping into a vast wealth of information such as this, you can ensure you understand where the very best opportunities are and the likely customer behaviour within any given segment. When was the last time you critically reviewed your product ‘top-performers’? Do you truly know which customers to avoid should the economy change; in a good, or bad way? Proper analysis can reveal these types of behavioural insight; identify the best routes to market and show you the specific preferences for online channels. This way you can build a comprehensive picture of what each segment offers you and what you could offer them simultaneously.

Understanding your customers’ behaviour, their loyalty and the ongoing cost of their acquisition should all be vital attributes of your decision-making.

Strategic insight into early customer redemption, churn or inactivity within target groups is vital, understanding patterns of behaviour overlaid with appropriate lending policies can also be very useful.
Understanding, analysing and using the vast array of elements a market offers helps you maximize and prioritise your strategy. Identifying new trends ahead of a new product launch, for instance, will highlight how successful your campaigns are likely to be. At the same time, analytical intelligence can help raise your profile within hugely competitive online platforms and search engines. Even knowing more about the ‘marketing data universe’ can inform your online strategy for making relevant contact, through the right channels for your right customers. This includes current, or new.

Datasets are vast but can also be unwieldy. Simply owning a big list of names and addresses is of little use without appropriate insight into customer behaviour and trends. Accurate lists, formatted with managed details are vital to ensuring contact strategies are cost-effective and profitable. All of these components should be teamed together to allow you to formulate an effective strategy from prospective idea to launch – leading to success and return.
The good news: we can accurately scope all of your opportunities, overlaid with economic insight and benchmarking to provide strategically aligned plans.

Are you missing valuable opportunities in the market?