Opinion Piece: Relevant insight to help efficiency at each stage of the customer credit lifecycle

Customers are the heart of any business, and acquiring and retaining them forms an essential function for profitability and sustainability. Businesses today have access to more data than ever, which can be used to assist this function. However, value can only be achieved if this data can be transformed into actionable information, which can be used to derive insight.

The key to a prosperous business is to find, gain and retain profitable customers. The customer value chain extends from engaging with potential customers, to acquiring them, managing them once they are on board, and sometimes, unfortunately, recovering debt from them. The success of these various stages hinges on having the right information available to improve efficiency and make the best decisions for the business.

Insight during engagement

During the engagement phase, it is vital to identify, segment, target and connect with prospects that are relevant to the business. It is pointless having an aggressive sales strategy that targets inappropriate customers. This is inefficient and leads to high levels of wastage. By identifying the right customer profile with access to the right information, businesses can ensure they engage with the appropriate potential customer. This in turn allows businesses to expand their marketable universe with qualified, profitable leads.

By leveraging unique views into customer information, behaviour, principals and so on, organisations can be empowered to target and engage with the right customers for their needs. They will also be able to better identify and reach new market segments.

Information is essential to developing relevant messaging to ensure the right offer is delivered at the right time, using the right channel, to effectively engage with new potential customers. The ultimate aim is to harness insight to create positive customer experiences from the outset. Armed with relevant insight, organisations can profile customers accurately, improve sales and marketing strategies, and even tailor sales teams according to customers and markets.

Insight for the acquisition phase

With regards to acquisitions, organisations need to focus on on-boarding customers with profitable terms and expectations, while ensuring the process is as smooth and seamless as possible for the customer. Customers want application processes to be quick, and they want fast decisions on granting of credit.

Harnessing appropriate data, organisations can implement processes such as prepopulated forms, automated credit decisioning, and effective cross-selling. This allows businesses to capitalise on point-of-service opportunities in real-time, confidently approve more ‘good’ customers, and determine the right offer for customers with regard to price, terms and more. In addition, relevant insight and automation help to isolate fraudulent and high-risk applicants, reduce the need for manual application reviews, and minimise the number of abandoned applications.

Insight for more effective customer management

Managing customers requires organisations to strengthen and grow customer relationships. However, it is often the case that once a customer is brought on board, they are managed reactively, with an annual review, possible limit increase, and no value added. Without customer insight, it is difficult to develop and maintain relationships, which is essential for proactive management.

Utilising data that delivers actionable insight, organisations can empower themselves to improve relationships and management practices. This in turns aids in improving loyalty for growth in profitability from existing customers, and retaining customers by protecting the customer base from competing offers. Developing a deep and dynamic understanding of customers can also help organisations to pre-empt delinquency on accounts, reactivate inactive accounts, and standardise policies for enhanced automation and efficiency as well as improved decisioning and workflows.

Insight for improved debt recovery

Information and insight can assist organisations to make better decisions with regards to obtaining and managing customers. However, even with the best insight, it is inevitable that some level of delinquency or bad debt will be experienced. During the recovery phase, it is important to optimise operations to successfully investigate, collect and reduce losses.

Armed with the right information, businesses can better understand their customers. With a deep view and improved workflow efficiency, organisations will be able to rank their debtors more effectively. The collections process can also be optimised to ensure the highest levels of payments, by enabling businesses to reach their debtors first, in the most efficient order to ensure optimal collections.

In conclusion

In an increasingly competitive world challenged by economic uncertainty, successful businesses rely on efficiency and good decisions. Sound business decisions in turn rely on accurate, relevant and timely information. Information is a powerful business tool, and placing it into the right hands helps organisations to understand the past, navigate the present and predict the future. Harnessing the right information throughout the customer value chain helps businesses to become more efficient and therefore more profitable and successful, ultimately assisting them to contribute towards the creation of a thriving and sustainable economy.