Business success depends on not just your ability to attract more customers than your competition but how many of them keep buying from you over the long term. Understanding your customer’s journey in their interaction with your brand is a key component in developing long-term brand loyalty. It helps you determine when, where and how to best interact with each customer in order to maximize engagement.
What is the Customer Lifecycle?
Customer lifecycle refers to the multiple stages a customer goes through over time in their interaction with your product, service or business. It maps out this journey from anonymous prospect to buying customer to brand advocate. The further along this lifecycle that your customer is, the more valuable they are to you. They’ll not only be willing to spend more on your product but they’ll also refer people in their social and business circle to you.
What is Customer Lifecycle Marketing?
Customer lifecycle marketing is all the different ways a business engages with a prospect, lead or customer, depending on their position along the buying journey. By catering to your customer’s requirements and needs in each stage, you will maximize your returns of every interaction. You will present the best incentives, messages, calls-to-action (CTAs) and resources to strengthen their attachment to your brand.
Customer lifecycle marketing isn’t just sending the messages your customer likes. Rather, it’s actively influencing their behavior in your favor. It recognizes that every prospect represents an opportunity for you to develop a long-term, profitable relationship.
Customer lifecycle marketing doesn’t look to grow customer numbers exponentially in a short duration but seeks to meet the customer’s need. It’s a relationship-oriented strategy that eventually boosts conversions, lowers churn rates and improves your marketing campaigns ROI. When customers feel valued and emotionally connected each step of the way, they respond by repeatedly purchasing from you and engaging in voluntary brand advocacy.
Stages of Customer Lifecycle Marketing
There are variations to customer lifecycle marketing models in large part due to the dynamics of different industries. Nevertheless, every life cycle model focuses on re-classify customers as they advance further along their relationship with your business and contribute more to your revenue. The following are the typical stages of a digital customer lifecycle.
- Acquisition – The first conversion by a prospect. This may entail subscribing to your mailing list, creating an account or downloading your mobile app.
- Activation – The first time the lead experiences your product’s value, such as during a limited access or free trial period.
- Revenue – The lead makes their first purchase of your product or service.
- Retention – Turning a customer into a long-term buyer of your product or service.
- Referral – A customer who likes your product enough to introduce it to new customers and leave positive reviews.
Benefits of Customer Lifecycle Marketing
Customer lifecycle marketing has tangible benefits for your business.
Cost and Time Savings
Research shows that it costs you 5 to 25 times more money to acquire a new customer than it does to retain an existing one. And it’s only logical. Existing customers already know and have experienced your brand and have demonstrated a need for your product. You can therefore re-engage them using historical behavioral and transaction data without the need to dive into a full-blown advertising pitch.
By devoting a sizeable part of your marketing budget to motivating existing customers in their forward movement along the purchasing journey via new features, up-sells and cross-sells, you will save time and money in strengthening their brand loyalty.
When you customize your marketing strategy in line with the needs of each customer, you make the customer feel personally appreciated and valued. Bland cookie-cutter messaging has an air of distance and lack of authenticity. Customer lifecycle marketing demonstrates that you’re deliberate and detailed in your effort at keeping the customer.
Remember, there’s often not much that distinguishes your product technically from your competitor’s. So when a customer opts to take their business elsewhere, it’s usually not because the other party has a superior product but that the customer didn’t feel like your sufficiently valued the business relationship you had with them.
No business can convert every single prospect or customer into a long-term loyal brand advocate. You can however greatly increase your odds of doing so if you take time to transition your customers through the different phases of the customer lifecycle.
Understanding your customer’s experience at each stage of the cycle helps you pick up problem areas that may be inhibiting their progress or pushing them away for good. By streamlining the cycle, you can increase the frequency of your purchases which in turn raises substantially the revenue you receive per customer visit (when compared to revenue from one-time buyers).
Create a Plan
By crafting a customer lifecycle marketing plan, you create a platform for your prospects, leads and customers to buy from you and advocate for your brand repeatedly over the long-term. To get it right, begin by mapping the typical path a prospect follows from when they first come into contact with your brand.