What Start-Ups Can Teach Enterprises About the Customer Life Cycle

We frequently see our enterprise customers struggle with excessively complex processes that hinder collaboration. This is especially true of the cross-functional teams responsible for transactional and triggered email. Whether it’s a complicated approval process or a lack of communication between marketing and product teams, these roadblocks impair a company’s ability to deliver a superior customer experience and fully maximize the value of each customer interaction. And here’s the scary part—new research shows that this inability to collaborate effectively is negatively impacting growth in significant ways.

We recently partnered with the CMO Council on the research study Gaining Traction with Every Digital Interaction. The study revealed that 87 percent of enterprise marketing leaders surveyed are not realizing the full revenue potential of their existing customers. A full 87 percent. Enterprise marketers need a serious wake-up call on the need to create email experiences that deepen relationships and help realize the full revenue potential of their most important customers—those they’ve already won.

Savvy marketers in the start-up world have realized that a single-minded focus on email as a tool for acquisition and activation comes at the expense of existing customers—and, more importantly, the growth potential they represent. Closely tied to the start-up obsession for making sure every product experience is amazing, they’ve also developed an expanded focus that encompasses the entire customer life cycle, including the optimization of transactional and triggered email. Messages from new-kids-on-the-block like Drift, Birchbox, and Buffer are frequently held up as examples of how to do it right. Some of our personal favorites include MeUndies and DonorsChoose.

So what lessons can enterprises learn from these companies? Here is a summary:

Re-imagine the Traditional Sales Funnel

Start seeing the sales funnel as a cycle in which Retention, Referral, and Repurchase are just as important as Awareness, Acquisition, and Activation.

The traditional sales funnel is represented as: Awareness → Interest → Consideration→ Conversion. In contrast, the life cycle model more closely resembles the entire customer journey, where the stages that follow Conversion are weighted equally to those that come before. When done really well, the customer life cycle actually becomes a spiral, where Repurchase leads back to Experience, which leads again to Retention and Referral, which leads to Repurchase, and so on. And the longer the cycle perpetuates itself, the greater the customer’s lifetime value.

Imagine how much growth potential a marketer misses out on when they consider their job done at conversion. And how many customers are lost because their post-purchase experience fails to recognize them as existing customers? This is particularly important as businesses shift from transactional to subscription models—for example, instead of buying DVDs, a customer now subscribes to a streaming service. So while a subscriber may have “converted” when they signed up, marketers must continue to nurture that customer by providing value and inspiring loyalty with every interaction.

Subvert the Status Quo

Up-end the status quo by viewing email as integral to the entire customer journey, rather than as primarily suited for the three A’s mentioned above. The goal is to get the customer into the ongoing conversion spiral and make their experience so amazing they never want to leave.

A key component of achieving that goal is transactional email. These vital communications—communications your customers welcome enough to open and click at rates marketers dream of—are prime opportunities for the following: 

• Cross-sell and upsell opportunities
• Soliciting reviews or referrals
• Reinforcing your brand experience
• Furthering the customer relationship to foster brand loyalty

Yet for far too many enterprise organizations, transactional emails are left in the hands of engineers who tend to think of them as set-and-forget triggered messages that serve a solely functional purpose. Start-ups have shown us there’s a much better way, a way that allows for content testing and optimization to find the right balance between the function of the email and the marketing opportunity it represents.

Smash Those Departmental Silos

Break down those departmental silos and facilitate cross-functional collaboration on these critical emails, with input from stakeholders across marketing, product, engineering, and IT departments. To realize the revenue potential we’ve been discussing, start-ups implement processes that allow collaboration between the cross-functional teams responsible for transactional email, which simplifies workflows and makes it easier to create, test, and iterate the emails’ content. Start-ups can do this because their teams are smaller and much more nimble; the size and complexity of enterprise organizations make executing with the same level of collaboration seem like a daunting task. But enterprises can achieve the same result by implementing software that bridges the gap.

The goal is not for marketers to wrest transactional email out of product or engineering’s death grip. The goal is to facilitate meaningful collaboration between all stakeholders, on every existing and new transactional email your organization sends.

While prioritizing existing customers and transactional emails may involve a significant shift in mind-set for many marketers, doing so requires more than just a new way of thinking. You should also be prepared to allocate time, resources, and budget to find and implement the right tools. But as many successful start-ups have shown us, the returns can be phenomenal. Start-ups have taken the lowly, purely functional transactional email and made it part of their overall marketing strategy, part of the overall customer experience. By making these emails look, feel, sound, and behave in ways that authentically reflect their brand — including website, brick and mortar, promotional email, social media, etc.—startups are building fanatically loyal customer bases that many enterprise organizations still only dream of.

Matt Harris is the cofounder and CEO of Sendwithus and has extensive email and product expertise, acquired working with Fortune 500 clients and contracting for government and private software companies. After graduating with a degree in computer science from the University of Victoria, he cut his start-up chops in the inaugural cohort of FounderFuel, a Montreal start-up accelerator. A self-proclaimed hacker, email nerd, and avid rock climber, Harris cofounded Sendwithus in 2013 in Victoria, Canada, and later moved to San Francisco to participate in the Y Combinator program.