Customer lifecycle – what does the customer lifecycle look like?

Today’s customers expect much more from a brand than the product or service itself. They want value, relationships and commitment. This is helped by a concept such as the customer lifecycle, which is the foundation of effective relationship marketing.

In this article you will learn:

• What is the customer lifecycle?
• What are the stages of the customer lifecycle?
• What is customer lifecycle management?

Customer lifecycle – definition

The customer lifecycle comprises several main stages, which can be divided conventionally, but typically include the following phases: customer acquisition, customer engagement, sales, value delivery and customer retention. Each stage has its own unique characteristics and requires different marketing strategies and activities.

The customer lifecycle is a term used in the marketing and management field that describes the stages a customer goes through when establishing and maintaining a relationship with a company. The expression refers to the process by which a potential customer becomes aware of a company’s offerings, then transforms into an active customer, and may eventually become a regular loyal customer.

Customer life cycle definition

Stages in the customer life cycle

According to a generally accepted division, there are 5 stages in the customer life cycle. These are respectively:

Awareness

The awareness stage is when potential customers first become aware of a brand or product. Its purpose is to get the customer’s attention and interest in the company’s offer. Building brand awareness is not an easy task, but there are several proven techniques that can help you in this process. These include:

• Advertising – this can include both online advertising (e.g. Google Ads or Facebook Ads) and offline advertising (e.g. via press, radio, television).
• Content Marketing – creating and sharing content that is valuable to potential customers. This content can include blogs, articles, videos, podcasts, infographics, webinars or e-books.
• SEO (Search Engine Optimisation) – optimising a website for search engines can increase its visibility so that potential customers searching for products or services online will find it.
• Social Media – having a social media presence allows you to interact directly with potential customers in places where they spend a lot of time. Using Facebook, Instagram, LinkedIn or Twitter, you can share valuable content, answer fans’ questions and create relationships that engage potential customers.
• Event marketing – attending trade shows, conferences, webinars or workshops can help you reach potential customers – giving you the chance to introduce them to your products or services.

Engagement

Customer engagement is the moment when a customer is already aware of your brand and its offerings, and your job is to keep them interested and get them to interact further. Remember that engagement builds a relationship between the brand and the consumer. It thus allows you to create a bond that can convince him or her to decide to buy your product or use your service. Engagement is important both in terms of attracting new customers and retaining existing ones. So how can you increase customer engagement? Some of the things that will help here include:

• Educational content – educating customers about your product, service or industry is a great way to increase their engagement. By doing so, you prove that you are an expert in your field and give consumers value that can help them better understand your product, which can ultimately contribute to a positive purchase decision.
• Social media interactions – social media offers the opportunity to interact directly with customers. Provide answers to questions, respond to comments and create content for your audience that they will find interesting and engaging.
• Personalisation – this can include individually tailored offers, product recommendations or personalised emails.
• Excellent customer service – fast and efficient customer service can significantly increase customer engagement. After all, consumers want to feel that their needs are important and that you are ready to help them solve any problems they may have.

Conversion

Conversion is the point at which a potential customer becomes an actual consumer – making their first purchase or undertaking another desired interaction. It is now that the effort you have put into building awareness and increasing engagement is transformed into real profit.

Conversion is a key indicator of the effectiveness of your marketing and sales efforts. To achieve a high conversion rate, it is essential that you take care of:

• Landing pages – landing pages, tailored to a specific offer, can significantly increase the chances of conversion – providing customers with exactly what they are looking for.
• Website optimisation – improving specific elements of your website, may include A/B testing, design optimisation, improving page load speed, and more.
• Call to Action (CTA) – a clear and powerful call to action directs the customer to take the desired action.
• Short and understandable purchase process – a complicated or lengthy purchase process can result in cart abandonment. Streamlining the purchase process and eliminating the unnecessary will instead increase conversions.

Remember to constantly monitor and, if necessary, optimise the conversion rate. After all, understanding your customers’ motivations and what discourages them is the key to sales success.

Retention

Customer retention is about keeping consumers satisfied at a level that makes them decide to buy your products again or use your services again. This is very important for any business – the cost of acquiring a new customer is often much higher than the expenses associated with retaining an existing one. In addition, returning customers are less sensitive to possible price changes. A high consumer retention rate can therefore significantly increase the profitability of your business.

Loyalty

A loyal customer is one who continues to shop with your company and is so satisfied with their experience with your brand that they recommend it to others and thus become an brand ambassador. Building loyalty is an extremely important part of your business strategy – loyal customers usually generate significant and long-term revenue. How do you build customer loyalty? Among other things, excellent customer service, personalisation of messages, loyalty programmes, a proactive approach to problem solving and continuous product or service innovation will help.

Customer lifecycle management

Customer Lifecycle Management (CLM) is a strategic approach to managing the entire customer lifecycle within an organisation. Its aim is to maximise the value the customer brings to the business by understanding and meeting their needs at each stage of their ‘journey’.

Effective customer lifecycle management is both a way to increase profits and a technique for building lasting and valuable relationships with customers. When looking to properly manage the customer lifecycle, remember to include elements such as:

Target group analysis

At the outset, you need to identify your target group, understand what they are really interested in, what their needs, expectations and motivations are and what challenges they face. Understanding your customer will enable you to create products or services that really meet their expectations. By analysing your target group, you will also identify the appropriate communication channels through which to reach your audience.

The target audience analysis should be thorough, detailed and take into account demographic, behavioural, psychographic or geographical factors. To analyse your target audience, you can use various analytical tools that will allow you to collect and analyse large amounts of data. These tools can help you identify important trends and patterns in customer behaviour, so you can better understand their needs and expectations and create a more effective marketing strategy.

Relevant content marketing

Providing valuable, interesting and tailored content to your customers will also help you to manage the customer lifecycle effectively. This will enable you to build strong relationships and maintain engagement at each stage of the customer lifecycle.

Keep in mind that an extremely important part of content marketing is providing consumers with information that is useful and interesting to them. By creating quality content, you can help your customer solve their problems, improve their skills or better understand your industry.

Adequate content marketing has many benefits. First and foremost, it helps you establish yourself as an expert in your industry. A customer who receives valuable content from a brand develops trust in it and perceives it as an authority in the field. This, in turn, translates into his or her greater engagement and willingness to build a long-term relationship.

What’s more, by tailoring content to the different stages of the customer lifecycle, you can influence conversion, consumer retention and loyalty. At the awareness stage, interesting and educational content can capture the attention of potential customers and build brand awareness. At the engagement stage, content marketing will answer questions and address customer concerns. Valuable content will increase their engagement and brand loyalty. In the loyalty stage, on the other hand, quality content will deepen the relationship built and encourage consumers to take further interactions.

Don’t forget that content marketing can take many forms – such as how-to articles, e-books, podcasts, videos, infographics or webinars. Adapt the format and distribution channels to the preferences and habits of your target audience.

Added value

Added value also plays an important role in successful customer lifecycle management. Offering it involves providing customers with additional benefits that go beyond the product or service itself. This translates into greater customer satisfaction and supports the building of strong, long-term relationships with customers.

Delivering added value is important at each stage of the customer lifecycle:

• At the awareness stage – it can attract the attention of potential customers and differentiate the brand from the competition. Offering added value is in the case of providing information, guides, articles or educational material, related to the industry, which helps customers to better understand their needs and problems.
• At the engagement stage – offering added value here is about providing customers with unique experiences and opportunities to interact with the brand. We are primarily talking about unique content, access to industry events, training programmes or competitions that engage customers and allow them to build a relationship.
• At the conversion stage – at this stage, added value can help convert potential customers into actual buyers. To make this happen, you can offer them additional benefits such as special offers, free samples, discounts or additional services. In this way, you will encourage consumers to make a positive purchase decision.
• At the retention stage – added value helps to retain customers and prevent them from switching to other, competing brands. Added value in this case includes loyalty programmes, personalised offers, invitations to interesting events or excellent after-sales service.

Remember that added value should be focused on the needs and expectations of customers. Try to understand what they are really looking for and what they expect from your brand. Providing consumers with the right added value will help build trust, increase their satisfaction and brand loyalty.

Excellent customer service

Excellent customer service is a process that involves all stages of creating a relationship with the consumer. It is primarily aimed at building trust, increasing customer engagement and loyalty and achieving long-term business success.

If you want to manage the customer life cycle effectively, be sure to meet consumers’ expectations at the various stages of their interaction with the brand. Here are some aspects to pay particular attention to:

• Empathy and understanding – excellent customer service is all about an empathetic approach that manifests itself through understanding the consumer’s needs, expectations and perspective. Customer service staff should listen carefully to the customer, seek to understand their situation and, based on this, provide solutions, tailored to their individual needs.
• Availability and quick response – customers expect their questions and problems to be resolved in the shortest possible time. The right organisation of resources, appropriately trained staff and the use of appropriate technological tools will allow for quick response and effective resolution of customer issues.
• A personalised approach – every customer is different, so it is important to get to know the consumer, gather information on their preferences and interaction history and use the data obtained to tailor communications and offers.
• Clear and effective communication – customer service staff should have highly developed interpersonal skills. The communication they use should be clear, understandable and customer-focused – allowing customers to express their opinions and comments.
• Continuous improvement – ensure that you collect feedback and opinions from consumers, conduct customer satisfaction surveys and use the data obtained to make continuous improvements to your customer service.

An understandable purchasing process

In an effective customer lifecycle management process, an understandable purchasing process is also very important. It fosters a positive buying experience and maintains engagement at every stage of the customer lifecycle. So how do you create an understandable purchasing process? Pay attention to aspects such as:

• Clear product or service information – customers need to have easy access to information about the product or service on offer. Ensure that features, specifications, price or terms of purchase and delivery are included in the offer.
• Simple steps in the purchasing process – the purchasing process should be broken down into steps that are easy to understand and uncomplicated. Create an intuitive interface so that the customer does not find it difficult to go through the different parts of the purchasing process.
• Customer support during the buying process – the customer should be supported at every stage of the buying process. This could include online chat, a phone line or a FAQ section. This will clear up your consumers’ doubts, provide answers to their questions and make the buying process more efficient and comfortable.
• Payment process – it should be secure, simple and easy to understand for customers. Offer your consumers a variety of payment options – this way you fully meet their expectations and preferences.
• Order confirmation and tracking – once an order has been placed, the customer should receive a purchase confirmation and the ability to track their order. In this way, you will provide them with a sense of security, thus gaining their trust.

An understandable purchasing process provides customers with comfort, convenience and time savings, thereby minimising the risk of customer frustration. This allows the consumer to experience positive interactions with the brand, and this enables you to build loyalty and long-term relationships.

Technical support

Adequate technical support at the various stages of a customer’s interaction with a brand is important in the context of customer lifecycle management. This is because it enables positive relationships to be built, increases trust and the likelihood of consumer retention.

The most important aspects of technical support are accessibility and responsiveness. Customers expect their questions, problems or concerns to be resolved as quickly as possible. Therefore, it makes sense to create a technical support team that can quickly provide consumers with the necessary assistance when needed. Providing technical support to customers can include a variety of activities, such as:

• answering questions and resolving problems,
• installation and configuration of equipment,
• repair and service,
• upgrades and enhancements.

Personalisation

Personalisation is another aspect that allows for effective customer lifecycle management. This technique involves tailoring interactions, offers and communications to individual customer preferences, needs and expectations. This makes it possible to build strong and long-lasting relationships with consumers. Personalisation can include various elements such as:

• Personalised communications – you can tailor the content of communications, such as emails, notifications or marketing campaigns, to your customers’ preferences and behaviours. Personalised messages may include, for example, including the customer’s name in the message.
• Personalised recommendations – the use of algorithms and data analytics allows you to generate personalised product recommendations or content that is of interest to a specific customer.
• Personalised loyalty programmes – using customer data analytics, you can offer individualised rewards, special offers or discount programmes that are tailored to the customer’s purchase history, needs and preferences.

Automation

Automation involves using technology and IT systems to automatically perform tasks, processes and interactions with customers at different stages of the consumer lifecycle. This makes it possible to effectively validate ongoing activities and create consistent and personalised customer shopping experiences. What’s more, automation also saves time and resources. You can implement it in the context of aspects such as:

• Marketing campaigns – you can use campaign management systems, or tools, to create and send personalised marketing messages.
• Sales process – with automation you can optimise your sales processes, such as lead generation or order processing. Sales automation systems will help you track customer contacts, analyse sales results and generate reports.
• Customer service – you can also use automation in the area of customer service. Chatbots and auto-response systems will help you to provide quick and personalised answers to customer queries. You can also introduce self-service systems that give customers access to the information they need, allow them to update their data and track their orders.
• Loyalty programmes – with help you can also monitor and manage loyalty programmes. Automation will allow you to collect customer data, generate loyalty points, send personalised offers or generate reports on customer activity.
• Data analysis – in this case, you can use systems such as Business Intelligence systems or big data analysis tools to collect, process and analyse customer data. The automation of data analysis will allow you to better understand your customers’ behaviours, preferences and needs, so you can tailor your activities and offers to their individual expectations.

Feedback and reviews

Customer feedback and reviews are important feedback that will enable you to better understand consumer needs, preferences and expectations. Feedback and reviews are therefore very important for effective customer lifecycle management. Here are the key benefits of collecting and responding appropriately to emerging feedback and reviews:

• Building trust and credibility – customer feedback and reviews are considered a reliable source of information. Potential customers often suggest the opinions of others before making a purchase decision. Positive reviews can therefore build trust in a brand, attract new customers and therefore – increase conversions.
• Understand your customers’ needs – customer feedback and reviews provide valuable feedback on their experience with your product, service or customer service. Analysing this information will help you better understand what your consumers’ expectations and needs are. This will enable you to make improvements to the products or services you offer that are tailored to your customers’ expectations.
• Engaging customers – encouraging customers to leave feedback and reviews can increase their engagement with your brand. This is because consumers feel important when they see that their opinion is taken into account. This can contribute to building an emotional bond with the brand and greater loyalty from customers.

Support and after-sales service

The period immediately following a purchase can be a difficult time for consumers, who can fall victim to a condition known as ‘buyer’s remorse’. The best way for brands to ensure this does not happen post-purchase is to have a strategy for understanding customer satisfaction and providing support to new customers at this critical stage. Interviews with selected customers should include questions such as:

• How was the buying process for you?
• Were there any moments in the buying process that went less/better than you expected?
• What did you think of the onboarding process?
• Were the instructions you received during the purchase and implementation process clear and understandable?
• Were the support options clearly explained?
• Were you satisfied with the support options offered?
• What can we do to help you succeed in the organisation?

The more engaged customers are, the more products they will buy. Therefore, marketers need to make sure that customers are happy with their purchases. Ensuring this includes providing a constructive return/exchange policy and providing effective customer service.

Customer service is key to repeat or new purchases. Apple is one of the most successful companies in this area with Genius Bars and other services that allow customers to receive free help and support; for every product purchased, customers will receive all the support they need.

Summary

In summary, the customer lifecycle is a strategic approach to customer relationship management that encompasses five main stages: awareness, engagement, conversion, retention and loyalty. Effective customer lifecycle management is the key to building long-lasting and valuable relationships with consumers and the way to achieve business success. To properly manage the lifecycle of your customers, you need to understand and consider their needs, preferences and expectations at every stage of their journey. Applying the right strategies and tools will increase consumer loyalty and satisfaction and give you a competitive advantage.