Fewer, but more loyal clients

The companies that survive a crisis are those who have taken care of and strive to develop a close relationship with their customers. This is achieved with excellent service and mutual understanding.

Today, we live in uncertain times; something that is unfamiliar to a generation that has been so accustomed to good times. The scope and depth of the global economic crisis is latent in all areas of business, government and personal finance. Despite the fact that the crisis did not catch Mexico off guard, there are still victims in all sectors.

Why recount the origins of the crisis or ponder how long it will take before the Mexican and global economies recover? We receive the information and analysis shared by specialists on this topic through media headlines on a daily basis. Suffice it to say that things are not good and all indications say that this something we will deal with for a long time; now is the time to handle the situation with great objectivity and a cunning approach.

Not all is lost
In the midst of this environment, there are great opportunities for companies that have managed their client relationships with care or who are willing to make an extra effort at this time. Beyond the basic strategies, which depend on professional ethics and a healthy financial positioning, there is a strategic strength in developing a close relationship with customers.
A hypothetical example is two credit card issuers that offer the same product: same acceptance rate (CAT), line of credit, fees, and even design of the card. However, the first, issuer "A" spends most of its budget on advertising and widespread acquisition of new customers, and a smaller part in giving discounts and special offers to its current customers.
While issuer "B" spends most of its budget on a loyalty program with communication, education and benefits for its customers, and spends the lowest share in advertising and acquisition-focused customer segments. Now that the crisis has arrived, which of the two issuers do you think will do better?

"A" will most likely find that, over recent years, it has accumulated a greater number of clients than "B." Excellent! The issuer has achieved significant market penetration, and therefore has more customers with whom they’ll ride the storm of the crisis period. Now ask, are these quality customers? What is their credit card spending average? What is the rate of delinquencies and how many late payments do they generate? And more importantly, what kind of customer relationship exists? What is the average churn? What is the level of cardholder loyalty?
While issuer "A" devoted its time and expense to fill their portfolio with customers, issuer "B" invested in identifying, understanding and developing a close relationship with its clients—even with the most risky consumer—to ensure that its customers see the product as more than just a credit card, but also as a tool to help them manage their spending.

So, even though issuer "B" will weather the economic crisis with fewer customers than "A," its customers have a better payment history, a higher spending average and a lower rate of past-due bills. These are customers who, thanks to being fully identified, tend to have a low program dropout rate and who demonstrate a high level of loyalty.

Take a risk!