Consumer Lifecycle

Maximize Customer Lifetime Value

Digital businesses experience an accelerated customer lifecycle. Customers browse, buy, and become active in real-time 7x24x365. But it is also easier for digital consumers to quickly click away, abandon their purchase or cancel their relationship.

The lifetime value and profitability of a customer is dependent on effective management of the key consumer lifecycle phases:

1. ATTRACT consumers to consider your services/products
2. CONVERT consumers from browsers to buyers/subscribers
3. RETAIN consumers as ongoing recurring paying subscribers

Advanced payment strategies can help digital merchants better attract profitable customers, increase conversion rates and reduce churn.

Attract Consumers

Merchants typically use promotional offers, trial periods, unique content, bundled offerings and more to attract potential consumers. Savvy online merchants are increasingly adding flexibility and choice in payment options as the '5th P' of their marketing mix.

Customers purchasing offline know they can use many payment options: cash, check, credit card, store card, layaway, and many financing options. When given a choice, consumers typically use credit cards only 30% of the time in offline retail transactions.

Yet merchants in the online world artificially restrict digital commerce by limiting payment choice: Over 90% of all online sites require a credit card to pay. By adding non-card payment options and "No Credit Card Required" messages, online merchants can attract more of those consumers that cannot or prefer not to use credit card. Download our "No Credit Card Required" whitepaper.

Convert Consumers

Companies marketing digital goods and services spend billions of dollars to attract consumers to their sites. But then merchants experience 50, 60, even 80%+ consumer abandonment rates at the point of purchase - making the return on their marketing and advertising investment very low.

Online merchants often inefficiently increase their marketing spend to attract even more consumers, yet they continue to lose many customers right at the point of payment. Instead, they should focus on how to solve the 'final click' problem of getting consumers to complete the transaction.

Over three quarters of consumers indicate they would be more likely to buy more if a merchant offered more convenient and secure ways to pay.

Merchants that present a wider choice of acceptable, safe and convenient payment options, and innovative tiered payment choices, can overcome these purchase barriers and dramatically increase conversion rates. Learn more about advanced payment options.

Retain Consumers

Merchants with recurring subscription models and repeat purchase models have the potential to maximize a long term profitable revenue stream from their customers.

Yet nearly half of recurring billing customers can become unbillable annually solely due to payment failures. Voluntary churn and involuntary churn erode revenue for digital merchants and network operators alike.

Before merchants consider re-allocating resources to costly churn-preventing promotions, they should deploy low-cost payment practices that significantly increase retention rates and billing continuity.

While credit cards are a universal and effective pay method, up to 30% of cards automatically expire each year. In addition, over 50 million primary cards are within 5% of their credit limit - causing frequent subscription interruptions.

Merchants can reduce both involuntary and voluntary churn by deploying card updater programs, requiring customers to select both card and non-card backup payment options, and providing more continuous and convenient non-card payment methods. Learn more about using PhoneBill to retain customers...