The Impact of Customer Life Events on Brand Switching



Ellipsis turned 5 this year; this 'company life event' prompted us to be more introspective than we would normally be. We feel grateful and a little lucky as the Small Business Association says 50% of businesses fail during their first five years and 66% during their first 10.

We made the top half!

So, we took a breath and tried an objective view at the lessons we have learned on the way. Not just in the earliest years where chaos was expected and experienced, but about our fifth year where there would be more stability, surely?

In the last year we have changed; our main banking relationship, began the move to company credit cards with a new issuer, appointed new bookkeepers, implemented a new provider of a secure data environment… we made a lot of changes.

We had simply matured as an organisation, growing up was the catalyst for making changes that made life more efficient and more fun.

This accelerated rate of change that coincided with a change in life stage got us thinking about the life events that are likely to prompt brand switching for consumers, an interesting challenge for marketers.

Our belief is that customer loyalty is (partly) the result of good marketing. But we are sensitive to the fact that customers are NOT passive receptacles of marketing messages as you go about the loyalty building process. Their life and personal events have a direct impact on their decision making that we should consider as we plan for relevance.

Sounds obvious?

Perhaps, but we have an additional customer element to consider. First, in every business category there are some customers inclined to be fiercely engaged and loyal to a brand, (7% of customers in the toilet paper category for example). And there are some customers who really do not care enough about your category to ever select you, or anyone, as a favoured, loyalty worthy provider. They are just not that into you.

These are individual characteristics of customers , and impossible, extremely difficult or expensive to change. The customers respond to your marketing in proportion to the importance they place on your category in their life. It is worth investigating levels of engagement with your category to shape strategy around the likely impact of personalisation, for example.

Using banking as an illustration; 1

But 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.

Product categories have inherent differences in the level of engagement you can expect from customers and therefore the type of marketing that will be most productive. If you are working with babies or pets, personalised marketing is best as most customers are actively looking for a brand to trust. If you are an undifferentiated pre-paid mobile provider, best look to price or value bundles as customer propensity to loyalty is low in your category.

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;

  1. It demonstrates you are paying attention to them, as individuals
  2. It allows your marketing to be relevant, as a proof of 1) and
  3. 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.


Ellipsis Hierarchy of CX


Study Customers’ Change Events

Understanding the events, their impact on levels of engagement customers have with your category, as predictors of switching can have a large payback.

We estimated some years ago that there was $4.5 billion in revenue 'adrift' each year in the Australian banking market alone. Each defection takes up to 3 other products with it. (Savings account switching takes 1.8 other products away on average) 2.

Not all life events can easily be detected, but that does not mean you should monitor and prepare for none. USAA a bank in the US organizes service teams around segments of customers and then goes further by organizing around life events such as graduation or divorce. Customers who have given little thought to their bank for years in a moment of truth experience a bank who is empathetic, helpful and smart 3.

In Australian banking for example, 38% of consumers have a life event that (likely) 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 . Knowing what indicates a sign of vulnerability to switching is both a chance to retain and a chance to recruit customers.


Key Customer Triggers for Switching

Life moments become triggers and opportunities for bank switching – 38% of customers have, or expect to, experience a life event in a 12 month period. Changing jobs is the most frequent trigger 4


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.

What change in customer behaviour is the most important indicator for your business? How do you encourage customers to tell you they are facing a life change, either explicitly or passively?

Time is of the Essence

To state the obvious, responses to leading 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...

Operational efficiency is mandatory. If you cannot respond quickly, best to stick to the most predictable events, those that are based on time e.g. even today half of 20-21 year olds have left home and are looking to set up a home, so at least you know which half of your marketing investment…

An approach from our incumbent bank at the 5-year mark as a company, finally in the “50% who survive” category may have convinced us to stay. We (or they) will never know.

It is great to now be old enough to go to school and we look forward to continuing our education - with your help.


We are Ellipsis, the Customer Loyalty Experts. We help businesses thrive through solving complex customer problems. Please get in touch, we’d love to talk.




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