Understanding the customer lifecycle enables sales and marketing teams to deliver timely and targeted messages. Just like life, customers progress through stages of knowledge when it comes to your product. Guiding them through this process should be easier, and if done correctly, they can become lifelong customers.
Explaining the customer lifecycle
The customer lifecycle refers to the various levels of product knowledge and usage that individuals go through as they learn more about your product and eventually make a purchase. It’s important to note that this definition focuses on the customer, providing them with information when they need it, rather than using strategies like cold calling to push them towards a purchase. (Note: Although called a customer lifecycle, this approach also applies to potential prospects who may become customers.)
However, the customer lifecycle doesn’t end with a purchase. The concept holds different meanings for different types of companies. For example, for organizations that offer SaaS products, the customer lifecycle includes ongoing efforts to encourage renewals, requiring a dedicated effort to ensure continued usage of the software.
Before delving into the 5 customer lifecycle stages
Five stages? Sounds familiar, right? That’s because it aligns with the concept of the sales funnel. The terms customer lifecycle and sales funnel are often used interchangeably, although they can sometimes create confusion. But first, let’s explore the difference between sales funnel and customer lifecycle marketing.
In essence, the distinction lies in “direction.” The sales funnel assumes that a prospect progresses from one stage to the next within the funnel, and sales and marketing efforts focus on encouraging this progression. On the other hand, the customer lifecycle model recognizes that a prospect may:
- Skip a stage
- Lose interest temporarily and then return
- Buy a competing product but remain aware of your brand, which can be leveraged
In other words, customer lifecycle marketing is non-linear. Since customers may take different paths to reach the same destination, it’s essential to be equipped with additional tools that nurture relationships rather than solely focusing on qualifying and pitching.
Now, let’s explore the 5 customer lifecycle stages
At each stage of the customer lifecycle, sales and marketing teams can employ various actions to provide prospects with the information they seek. Common strategies like having an optimized website and offering engaging content are typically part of any customer lifecycle marketing strategy. Below, let’s examine touch points that enhance personalized connections, which are crucial in customer lifecycle marketing:
1. Awareness – Introduce prospects to essential information about your brand
- Social media posts that encourage comments and connections
- Research reports targeting specific segments of your target customers
2. Engagement – Initial contact with a prospect
- Lead magnets that provide valuable information in exchange for contact data
- Conversational marketing techniques such as bots and live chat
3. Intent – Provide engaged prospects with “fill in the gap” information
- Offer free trials
- Present case studies
- Host webinars
4. Conversion – Finalize details and close the deal
- Provide price quotes
- Encourage customer referrals
- Conduct sales calls
5. Retention – Maintain customer loyalty
- Implement loyalty programs and offer gifts
- Collect feedback through forms and follow-up calls
- Deliver dedicated customer service
Managing the customer lifecycle
Understanding the significance of sales and marketing teams working closely together in managing the customer lifecycle is vital. To start, here are some best practices:
Build an ideal customer profile
Identify the individuals interested in your product and understand their pain points. This necessitates researching prospects and creating an ideal customer profile.
Map the customer journey
Utilize the insights gathered during the profiling stage to determine where potential clients shop and what they seek. This information can be visually represented to guide the design of interactions between prospects and your brand. In a customer lifecycle approach, pay close attention to personalized touchpoints that enable direct connections with prospects.
Set metrics
Define the metrics that will assess the effectiveness of your activities at each stage. Determine target numbers such as the desired rate of progression from engagement to intent or the churn rate goal after six months. Through this process, you can optimize the customer journey and increase the overall profitability of the lifecycle.
Prepare for engagement
When prospects display intent signals indicating they have become warm leads, it’s time for direct contact from the sales team. The customer lifecycle manager determines the exact behavior that qualifies for proactive steps. The sales team should be prepared with appropriate messaging and collateral to capitalize on these opportunities.
Establish excellent post-sales service
After completing all the aforementioned steps, focus on keeping customers satisfied. Retention metrics come into play here, as well as close supervision to ensure customer service teams are performing at their best.
Benefits of implementing customer lifecycles
Companies that adopt a customer lifecycle approach understand that the battle for revenue isn’t over once a deal is closed. Alongside efforts to convert prospects, these organizations invest in post-sale activities that positively impact the bottom line. Some benefits include:
Expense reduction
Acquiring new customers costs about six times more than retaining existing ones. Once a client becomes a customer, the need to allocate resources to their account significantly decreases. The sales and marketing process itself incurs costs, but by securing solid clients, revenue begins to flow in the opposite direction.
Retention improvement
Customer lifecycle marketing places significant importance on client support. Building strong connections during the initial lifecycle stages fosters ongoing relationships, often supported by dedicated account managers. The increased satisfaction resulting from excellent support is critical, as studies show that 80% of customers have switched brands after a negative experience. Additionally, satisfied customers often become brand ambassadors, potentially generating word-of-mouth sales, which contribute to 65% of new business opportunities.
Income increase
Effective account management and reduced expenses lead to increased revenue at a lower cost, resulting in a boost to the bottom line. Over time, this dynamic optimizes key sales metrics, particularly customer lifetime value.
In conclusion
- Customer lifecycle sales and marketing focus on delivering information at the right time and providing an excellent customer experience.
- Throughout the 5 lifecycle stages, emphasis should be placed on activities that directly connect with prospects and offer personalized approaches.
- Implementing a customer lifecycle strategy leads to greater profitability, improved retention, and increased word-of-mouth sales.
This article provided by Bruxt
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