Cognodata has developed a methodology for the financial sector capable of identifying the life events  and consumer segments of its customers with the information available in financial entities  . The methodology of the customer’s natural life cycle, based on knowledge of their consumption habits, has been developed by the most innovative retailers on the national and international scene.

Throughout this article, we will analyze how the information on the purchases we make is helping retailers to better understand the consumption habits of their customer segments and, ultimately, their natural life cycle.

Customer knowledge is obtained from information from purchase receipts and market studies. Marketing campaigns are designed and developed after segmenting customers and identifying their interests and key moments.

When we design campaigns based on consumption, it is essential to identify the differentiated needs of customers, taking into account their different profiles. If we knew the natural life cycle of customers and their homes, it would be much easier to design campaigns.

Carrying out a segmentation based on the natural life cycle of customers or households allows directing commercial actions with greater criteria, anticipating customer needs.

Segmentation by the natural life cycle of the customer can be structured based on different variables that identify our business and our customers, such as:

  • Age of the main decision maker of the household
  • Number of household members and their classification
  • Existence of children in the household, as well as the age of the minor child
  • Household income levels

In this way, it is possible to know the evolution of households and the life events that make them change segments, and identify their habits throughout their natural life cycle. For example, trends can be identified for each segment by consumption (by categories, volume, brands, etc.), by calendar (Father’s Day, holidays, Christmas, sporting events, etc.), by situation (weather, geography, etc etc.

The benefits that can be achieved using a natural customer life cycle segmentation are the following:

  • Better design and control of campaigns, by being able to better identify the most relevant events in people’s lives
  • Greater effectiveness of Marketing campaigns, by being able to anticipate milestones in the life stages of customers
  • Know the evolution of customers in their life cycles in a dynamic way

Retailers have been using this natural customer life cycle segmentation methodology for years. Financial entities have a great opportunity before them to import this segmentation model into their sector, based on the analysis of customer behavior and the identification of their most relevant life events.