What is a Customer Lifecycle?
The stages a consumer goes through in product discovery, purchase, and brand loyalty are the customer lifecycle. These stages may change between brands and firms, but a typical client lifecycle includes:
- Customers get to know of a particular product or service and seek one.
- Customers’ product selection decisions and post-purchase behavior.
- Keeping consumers and convincing them to promote the product.
Customer lifecycle marketing is a strategy that entails holistically examining the entire customer journey, beginning with the first point of contact, nurturing leads throughout the buying cycle, and then working to deepen the post-purchase relationship to ensure long-term loyalty and repeat purchases.
Understanding the customer lifecycle is critical for marketing success because it allows marketers to develop a personalized approach that engages consumers at every stage of their journey.
This always-on strategy necessitates personalizing communications to each touchpoint along the journey.
Grasp how individuals travel through the funnel with varying degrees of involvement necessitates a thorough understanding of the customer lifecycle, which is covered in full below.
Difference Between a Customer Journey and a Customer Lifecycle?
Before we continue, let’s take a moment to define some terms you may have come across. You may occasionally hear the word “customer journey” used in the same context as “customer lifecycle.” These are only two metaphors for the stages of your customer’s connection with you. One imagines these stages as steps toward a goal, whereas the other imagines them as stages in the life of a live, developing creature. Apart from that subtle variation in connotation, there isn’t much distinction between these expressions, which are frequently used interchangeably.
The Customer Lifecycle Stages
The first encounter with a customer with your brand to learn about your products or services is at the start of the customer’s lifetime. Consumers are currently seeking potential answers to their difficulties.
Ads, social media updates, and blog entries can help you keep on your client’s radar. Refine your SEO approach and maintain producing content.
The acquisition stage is distinguished by the conclusion of the preceding phase, in which customers begin a discussion to learn more about your products and services. You’d need to use different techniques depending on their channel.
In the digital marketplace, emailing is more widespread. Email conversations tend to be more professional, but that doesn’t mean you should abandon personalization. If you do it correctly, you can warm up customers and get them to subscribe to your email list.
This is the thrilling part. Your prospects are getting closer to a choice, and if you’ve made them feel valued and welcome, they’ll become paying clients.
You must spend on generating memorable consumer experiences in addition to assuring the quality of your items. To differentiate yourself from rival businesses, remove as many barriers as possible for your customers and personalize interactions.
After you’ve made a sale, you must focus on client retention. A simple thank you note followed by a customer satisfaction survey shows that you care about your customers.
Make every effort to provide 24-hour service and to be open about your return and refund procedures.
Above all, re-engage with your consumers via email marketing and push alerts. Make personalized product suggestions and internal blog entries relevant to their interests.
Loyalty is the stage at which consumers refer prospects to you. They post about their shopping experience on social media, write product reviews, and recommend your store to their friends.
That is why it is critical always to put your best foot forward when interacting with a consumer. You need a solid foundation of trust that has been steadily built over time.
What is Customer Lifecycle Management (CLM)?
Customer Lifecycle Management refers to a firm’s strategy, procedures, and campaigns that assist customers through the many stages of their relationship with the organization. It often consists of multiple customized touchpoints that help a client in becoming more engaged with the company’s product and, as a result, become more loyal over time.
There are several advantages to using this approach to consumers for a corporation, and this methodology may help with some of the most important company goals, such as:
Prioritize Investment in Specific Segments: Using this process, the company can objectively determine which lifecycle stages provide the most excellent prospects for growth and revenue and focus its resources on the most strategically aligned ROI.
Reduced Acquisition Cost: Focusing advertising spend on only customers in the awareness stage lowers overall customer acquisition costs. Furthermore, by methodically transitioning consumers from awareness to leads and eventually to first-time customers, the follow-up connection with people targeted by advertisements will ensure that the CAC invested will most likely result in an acquisition. Finally, gaining referrals from current customers provides the company with low-cost, high-intent leads that are simpler to nudge to the initial transaction.
Increase Lifetime Value (LTV) and Customer Retention: It is common knowledge that maintaining existing customers and increasing their LTV with the organization is typically less expensive than constantly gaining new ones. The lifecycle framework enables teams to identify and address gaps in the customer experience and sites of churn for current customers. In addition to retention, customer LTV may be increased over time by raising individual customers’ Depth of Spend (DOS) and Share of Wallet.
Improve their understanding of their Consumers: This technique gives businesses a unique lens through which to see their customers. It helps them understand how consumers’ demands vary over time and how to share relevant information while providing the best possible service.
Best Practices in Customer Lifecycle Management
1. Continue to Nurture Consumers after they have Made a Purchase
As previously stated, the customer lifetime continues even after a transaction. Customer retention is frequently more valuable and effective than obtaining new ones.
Whether you send a new incentive every quarter or a monthly check-in email, you want your consumers to feel valued and appreciated for doing business with you. After all, customers don’t owe you their business, but they selected you out of a sea of competition. Keeping in touch with clients after a purchase is efficient for regulating the lifecycle and preventing it from running its natural course (potentially ending prematurely).
Listening to your consumers is essential for efficient customer lifecycle management. This will help in the refinement of your approach across the lifecycle stages of reach, acquisition, conversion, retention, and loyalty.
2. Survey Current Customers to Identify Places of Friction across the Lifecycle
Customers who have purchased from you are your most reliable source of information for analyzing and optimizing your customer lifecycle. Send out questionnaires to learn how they heard about you, how they feel about your brand, and where they thought there were holes in the acquisition process.
Customers, for example, may remark you need an updated website, which indicates you should prioritize it for the next quarter.
3. Make Interactions with Prospects and Consumers More Personal
A critical component of managing the customer lifecycle is ensuring that every engagement, including phone calls, emails, and chats, is tailored to each stage. For example, you wouldn’t send a discount offer to an early-lifecycle consumer to purchase your product when they were still studying and contemplating a competition. Instead, you’d give valuable materials that would enlighten your prospect about the difficulty they’re experiencing and how they can solve it.
4. Interview Prospects who Never Converted to Find Out what Kept them from Making a Purchase
Your next reliable source of information? Prospects who never purchased. What is preventing your audience from converting? They may prefer a competitor’s product due to its simplicity of use, or they may believe they couldn’t discover enough information online to make a purchasing choice. Whatever it is, it will enable you to solve these problems while also feeding new clients into your flywheel.
5. Develop an Omnichannel Experience
Being where your customers are is the first step toward excellent lifecycle management. You won’t be able to manage the lifecycle efficiently and successfully until you provide an omnichannel experience to your customers. Inconsistent behavior or reliance on specific platforms will lead to gaps in your understanding of the client lifecycle.
How to Improve Customer Lifetime Value
You’ve tracked critical indicators, evaluated your customer’s lifetime value, and implemented technology to help you with your lifecycle marketing plan. What happens next?
It’s time to get hands-on and work on increasing customer value. For example, you may concentrate on increasing purchase frequency or profit margin. It all relies on your company and its goals.
But remember that CLV maximization must coexist with customer experience, so constantly evaluate the customer journey holistically – from first contact through customer relationship management – rather than exclusively concentrating on a particular measure or channel.
Here are some suggestions for constantly enhancing your customer lifecycle:
Encourage Brand Advocacy: Use online surveys, review websites, or incentives for recommending friends to encourage loyal customers to share their experiences.
Distribute Applicable Content: Make an effort to share relevant, engaging, search-engine-optimized material so that your organization appears more frequently when people search online.
Remove any Friction from the Purchase Process: Make sure your ordering and payment methods are easy and only demand relevant information. The fewer steps your consumer must take to complete a transaction, the better.
Monitor Your Industry: Compare your KPIs to industry averages to identify which ones you should prioritize. To maximize lifetime value, prioritize weaker KPIs.
Customer Lifecycle Management Metrics
Let’s look at the customer lifecycle metrics you should track at each customer journey stage.
1. Customer Satisfaction
Consumer satisfaction is essential for every customer. Customer satisfaction may help you determine how satisfied your consumers are with your brand since it influences their desire to suggest your items to others.
You should concentrate on customer service to identify opportunities for improvement.
2. Retention Metrics
This is a measure of your existing clients who continue to patronize your company over a specific period.
Customer retention metrics may help you determine how successful your company retains consumers by addressing their demands over time.
3. Product Performance
To determine the success of your product, you must concentrate on product performance indicators.
This allows you to monitor and analyze client happiness and how effectively your items meet consumers’ expectations.
In other words, you can determine which items’ features appeal to your customers and which are not.
4. Acquisition Metrics
As a business owner who appreciates the value of acquiring new customers, your acquisition metrics assist you in proactively managing and engaging prospects and creating valued lifelong clients.
This necessitates concentrating on your acquisition techniques to discover the best-performing areas and use them for improved client engagement.
You may use these measures to assess the effectiveness of your management team’s sales, pricing, and customer service.
Pitfalls Vs. Best Practices
Pitfall – Lack of personalization. Best practice – Proactive personalization.
The challenge with the customer lifecycle marketing method is that you must appeal to both new prospects and old clients at the same time. This complicates the process of personalizing the purchasing experience.
To engage your consumers, you may still personalize particular lifecycle phases. Emails and SMS messages, for example, should address the consumer by name. Indecisive clients can be converted with a personal callout and a focused offer.
Pitfall – Poor segmentation. Best practice – Data-driven segmentation.
Each consumer group has distinct tastes and expectations—poor segmentation results in dispersed marketing messaging that may or may not provide a return on investment.
Data-driven segmentation is an urgent requirement. Utilize data to find groupings of users who exhibit similar patterns of consumption and loyalty. Don’t limit yourself to age and gender norms. Find more segments based on demand, price, brand, specs, etc.
Pitfall – Sending repetitive offers. Best practice – Send contextually relevant offers.
Customer involvement is aided by offers, loyalty programs, discount coupons, etc. Repetitive offers may result in lower marketing engagement rates.
Strategize your marketing campaigns with relevant offers, and create these offers using features like recent browsing history and wishlists. Such appropriate offerings will aid in the retention of clients.
Customer lifecycle management is based on data. Personalizing advertising for consumers in different categories improves client retention and happiness. This technique gives firms a competitive advantage, resulting in increased sales and improved brand perception.
How Can Survey2Connect Help?
Survey2Connect is used by some of the world’s most trusted companies and has successfully managed their customer experience efficiently over the past years.
Survey2Connect provides a one-stop solution for all your experience management needs. With S2C, you find the correct answers to take timely actions. Get in touch with us for a demo.
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