A Marketer’s Guide to the Customer Life Cycle
Consistent revenue, good management, sound financial decisions, and talented staff, among many other factors, keep a business running. But there is one factor above all others that makes a business successful. Customer loyalty is one of the truest measures of long-term success because customers are the lifeblood of any business. Loyal customers will keep coming back to make more and potentially bigger purchases. They are also poised to become brand advocates, but loyalty must be earned and continuously nurtured. To establish loyal customer relationships, marketers must understand every part of the customer life cycle and how to communicate with customers at each stage.
What Is a Customer Life Cycle?
A customer’s life cycle encompasses all the interactions a customer has leading to finding your brand, converting to a customer, and remaining loyal to your business. It is a big-picture view of how customers interact with companies and what steps customers go through before purchasing a product.
The customer life cycle is a broader approach than a customer journey, which focuses on specific steps in an individual customer’s life cycle. It is also different than the customer funnel, which only moves customers in one direction in their buyer’s journey with the sole focus of making a sale. However, a customer life cycle describes how relationships with customers are built and nurtured.
Why the Customer Life Cycle Is Important to Marketers
It helps you understand your customers. Understanding your customers’ life cycle provides insights into the motivating factors that might change their purchasing behavior. You can use these insights to guide your marketing efforts so you can create content that reaches customers at each point in their lifecycle and address factors that might prevent them from purchasing.
It shows your customers lifetime value. You want every customer to bring in more revenue than you spent to attract them. However, simply calculating a single purchase doesn’t accurately reflect how much a customer brings to your company.
About 82 percent of businesses say that retaining loyal customers is more cost-efficient than acquiring new customers. You can use your customer lifetime value to track what you invested in acquiring each customer and what revenue they brought in through their time as a customer, including new customers they might have referred.
It increases your customer satisfaction rate. More than 68 percent of customers will spend more at a business that offers a positive customer experience. You can use customer life cycle insights to create a personalized experience. For example, you can suggest products relevant to a customer’s specific stage in their life cycle to increase the chance of a conversion.
5 Stages of the Customer Life Cycle (and How to Market for Each Step)
1. Reach. The first step a customer takes is discovering your brand. However, this stage might take longer if they aren’t aware they have a need. This is a critical time for your marketing team to reach those customers since they haven’t yet found your business.
A strong reach strategy uses outbound and inbound marketing efforts to create a demand for your product and raise awareness about your brand. These strategies are essential for getting your name in front of your ideal audience while they are first learning they have a challenge they need to solve.
Some of the best ways to increase your reach include:
- Content marketing
- Social media marketing
- Email campaigns
- Cold or warm calling
- Paid ads
2. Acquisition. The acquisition stage begins when a consumer turns into a lead. This can occur when they reach out to your company, complete an online form, follow you on social media, or respond to your marketing efforts. When they take these actions, they are expressing interest in your business.
Unfortunately, the average conversion rate is only 2.35 percent, with even the top companies only seeing a conversion rate of 11.45 percent. For most businesses, that means more than 90 percent of leads that never buy from your brand.
The acquisition stage is your chance to capture those leads and nurture them to increase the likelihood of purchasing from you.
Once a consumer expresses interest in your company, a marketing team’s job is to answer their questions and remove any roadblocks. You can perform these tasks through email campaigns, phone calls, connecting over social media, and posting relevant content on your website.
For example, a frequently asked questions page is an effective way to answer common questions that leads ask when deciding whether to choose your brand over your competitors.
3. Conversion. Once you qualify a lead, they move from marketing to sales. They have now moved to the conversion stage of their life cycle. In this step, they have all the essential information for purchasing. However, they still need a little more encouragement to press “buy.”
Make conversions simple. When you create content, landing pages, or ads dedicated to this stage, also include a clear call to action. These are simple phrases at the end of your content that provides the next step in the buyer’s journey. Most often, that step is purchasing a specific product.
4. Retention. Now comes the important part. A customer life cycle strategy doesn’t end after a single purchase. If you want to retain a loyal customer base, your marketing and sales efforts must continue beyond that initial purchase.
Your retention strategies are how you create a positive customer experience. You want to ensure customers get the most use out of your product or service. When they are happy with your service or product, they are more apt to return. This also increases your opportunities for upselling or cross-selling.
After their initial purchase, you can also request feedback about how they felt about their experience. This feedback allows you to address any issues while learning what customers respond well to in your sales strategies.
5. Loyalty. The most loyal customers eventually become brand advocates. About 93 percent of Millennials rely on online reviews when making a purchasing decision, and 50 percent of customers will act after reading a review.
A brand advocate is a loyal customer who promotes your company and products to others. This might occur through their social media account, word of mouth, or online reviews.
Continue to reward your customers so they remain loyal to your brand. Some ways to reward them include offering exclusive promotions and discounts, recognizing special occasions, including them in your marketing content, and requesting feedback about your interactions with them.
Use Customer Life Cycle Marketing to Build Positive Customer Relationships
In customer life cycle marketing, the “when” is just as important as the “what” and “how.” Understanding the customer life cycle allows marketers to approach current and potential customers with the right message at the right time. By doing so, marketing teams can improve the chances of not only making an initial sale, but of building customer loyalty as well. And when you show your customers that you understand their needs at each point in their life cycle, you will make them feel valued, creating a better overall customer experience.
Kellie Walenciak is the head of marketing and communications for Televerde, the preferred global revenue creation partner supporting marketing, sales, and customer success for B2B businesses around the world.