Life Events: the opportunity to build customer trust
In every business category there are some customers inclined to be fiercely engaged and loyal to a brand. There are some customers who really do not care enough about your category to ever select you, or anyone. It is worth investigating these levels of engagement with your category to shape strategy around the likely impact of personalisation, for example.
A customer’s response to your marketing will also depend on the importance they place on your category in their life.
High impact life events like marriage or the birth of a child can turn customer interests and priorities on their head remarkably quickly. This makes it important to understand the population of 'customers you have available for loyalty' in the targeting of your marketing and to recognise that when a customer experiences a life change, this presents an opportunity to test her new interest. Clues to life events are often changes in her behaviour with you i.e. indicators are often in the data.
Some catalysts for change are simply age related; insurance is typically of little interest to an 18-year-old but is important to older family members. But even these ‘predictable’ changes move over time. Roy Morgan reported in September 2019 that 10% more 20-21-year-old Australians live at home (55%) than just 10 years ago. 37% of 22-24-year olds live in shared households, up from 26% a decade ago.
Being customer-centric and relevant requires us to keep up!
Customers know we analyse their data, and are raising their expectations, looking for more than transaction driven loyalty. Demonstrating to customers you are responsive to their change in interests and life-events achieves three critical pre-conditions for loyalty;
- It demonstrates you are paying attention to them, as individuals
- It allows your marketing to be relevant, as a proof of 1) and
- It builds trust, giving you permission to be personal.
Trust is required for a relationship with customers and has two customer belief pre-requisites;
- Customers must believe you have their best interests at heart, especially when selling to them, and
- Customers must believe you are competent enough to look after their best interests.
Recognising life changes that are important to them is a good way to demonstrate both to the customer.
In Australian banking for example, 38% of consumers have a life event that (possibly) triggers switching each year. Changing jobs and moving to a new house are the most common and both deliver signs to the bank through transaction accounts, so should be detected and a marketing response delivered in the moment. Knowing what indicates a sign of vulnerability to switching is both a chance to retain and a chance to recruit customers.
Visible events such as a Change of Address are obvious and can present a threat and opportunity, but a change in purchasing patterns can be just as predictive of pending changes. We recommend you have at least the obvious events covered with a proactive marketing response.
Responding to indicators of customer changes must be timely or they prove you are not competent to deserve the customer’s trust; Nothing wastes money better than a rescue offer after the customer defects to competition, or a discount offer after the purchase, or the Removalist’s brochure after you have moved in...