Customer Lifecycle Management

Insights and tools to help companies increase the satisfaction—and value—of their customers.

Effective customer lifecycle management (CLM) can enable powerful customer interaction strategies that power significant business growth and profitability.

What we do

McKinsey helps clients maximize revenue and margin at every step along the consumer decision journey, from acquisition to upsell/cross-sell to loyalty and retention to debt management. We work with clients to analyze the behaviors and needs that characterize their most valuable customers, determine the right objectives (e.g., acquisition versus retention), and identify the best ways of reaching them (e.g., direct marketing and channel strategy). In practice, our work focuses on four primary activities:

• Driving customer lifetime value through deep analytics. We help clients quickly integrate massive amounts of disparate and new sources of data, providing a 360-degree view of customers. We also offer new long-term solutions to deliver sustainable impact through analytic support from McKinsey’s Consumer Marketing Analytical Center; outsourced solutions that build on McKinsey’s Solution Center (e.g., help avoid large IT investments by hosting data); the right set of data and tools leveraging new IT-enabled Marketing & Sales capabilities.

• Optimizing loyalty programs. Our team helps clients build integrated, cross-functional programs through an in-depth understanding of affinity and traction in relation to new and existing customers. We also help clients create and monetize loyalty programs and loyalty program data. Lastly, we help clients fine tune the program features to maximize returns going forward.

• Implementing front-line transformational change. Based on the insights generated by customer data, we also work with clients to develop transformation programs that help those on the front lines change their behaviors. This stage is often where companies struggle because they strive for a level of analytic sophistication that is hard for the organization to absorb and act upon. We help strike the right balance between sophisticated data analysis and the practical front-line change.

• Improving the customer experience. Optimizing the “customer experience” (CE) can create real and quantifiable value for companies—but only with a compelling and cost effective CE strategy linked to the broader strategy of the business. McKinsey helps clients think through the full set of points at which they interact with customers—from price to product to customer service—and determine the right level of CE to provide, based on a combination of customer expectations and the relative value of each customer segment. Good CE requires robust processes and technology, to be sure, but the most important factor is often culture—and that’s where we focus many of our efforts.

Examples of our work

• worked with a multi-billion dollar online retailer build the organizational, IT, and process capabilities needed to optimize customer conversion both online and by email, resulting in sales and EBITDA growth or 20 and 30 percent, respectively
• helped a hospitality company determine the customer lifetime value of more than 40 million customers while using customer insights to overhaul an outmoded loyalty program
• helped build an early intervention strategy to minimize customer defaults for a retail bank, helping prevent $110 million in annual credit losses
• helped a retail client build capabilities and increase revenues 18 percent at a telecommunications company, customer satisfaction nine percent year-over-year at a hospitality client, and EBITDA 15 percent in nine months