Commercial credit in the UK is undergoing huge change. It’s all about the customer. Providers creating a greater emphasis on customer experience will be sure to have an advantage.
One reason for change has been the boom in Small Medium Enterprises (SMEs) in recent years. There is now a huge growth of SMEs in the market compared to a decade ago. With many more knowledge and tech businesses arising.
This growth in the number of SMEs has affected how they behave as customers.
With so many new entrants commercial credit providers could now see a shorter average lifetime for these organisations – and that has a knock-on effect: shorter lifetime values, shorter risk, and shorter time to understand what they want and need.
With such significant changes in the commercial credit sector, it can be difficult for lenders to know how to position themselves. To survive and thrive in a changeable environment where should they focus?
There are 3 areas:
- Understanding your targeted segments – this means gaining insightful knowledge on what your customer needs and their lifetime value
- Customer journeys – what improvements are needed to make it easy for SMEs to access and take on a set of products more easily?
- Automation – much more work is needed in automating process to make more efficient, fairer, and easier decisions
It’s also worth considering how these factors interlink. Companies need to understand their customer segments to know what their lifetime values can be and what their preferences are. Automation can then help deliver a streamlined process where the customer experience is great and the proposed products are reflective of their needs. And, vitally, the cost to serve should reflect the shortened lifetime value. Better data and a better understanding of your data can help you realign your commercial credit policies in line with the changing market. The outcome, better customer outcomes.