Understanding customer lifecycle management
Businesses need to prioritise customer lifecycle management to both attract customers and retain them. Here’s how to get started with your own client lifecycle management programme.
Published February 14, 2022
Last updated February 23, 2022
It’s what every business strives to achieve: attract new customers, provide unparallelled service and goods and build a relationship that ends up in years of repeat business. Getting there, however, requires more than good intentions – it takes implementing a customer lifecycle management process. This guide will help you understand what is meant by customer lifecycle management, why it’s the key to a great customer experience, and how to avoid common mistakes in developing a client lifecycle management process.
What are the stages of the customer lifecycle management process?
The customer lifecycle can be thought of as an arc that builds from a customer first learning about your company and products towards the final goal: customer loyalty. The customer lifecycle occurs over five stages:
- Awareness The customer becomes aware of you and begins the first customer journey of what will hopefully become many. Perhaps your customer learned about your company through a social media post, an advert or a referral from a friend.
- Consideration The next step for these potential customers is to consider a purchase. Here, companies can help educate potential customers by creating a solid knowledge base, by providing a chat option to answer questions and by offering information through blog posts, webinars and other marketing materials to ease the customer into the next step. Customer engagement is key here.
- Purchase The purchase step needs to be as frictionless as possible, with many options to pay and as few steps as possible between the customer clicking “Buy” and receiving a confirmation email. This includes offering clear pricing and information about returns and refunds. Once someone has engaged with you either through creating an account or making a purchase, they become part of your company’s customer relationship management (CRM) record. That valuable data can be used to inform future marketing efforts as well as fine-tune the customer experience.
- Retention Retention is where work begins on the relationship. This isn’t about today’s revenues; it’s about the future. Send a thank you email to let the customer know how much you appreciate their choosing to do business with you, and make sure the customer can quickly get help post-purchase. You’ll also want to follow up with offers or discounts on items they looked at or that complement the original purchase to keep them coming back. And ensure all interactions go on record in a shared CRM system that the marketing and customer support teams can access.
Retention is where the relationship work begins.
Retention is about keeping the conversation going and using data to anticipate what the customer might need at each lifecycle stage. For a financial institution, for example, that means anticipating when a customer might be looking for a house, a new car, a loan to cover college, holidays, vacations, etc. For a clothing retailer, it’s making sure the customer knows about new services and new seasonal clothing lines.
- Loyalty or advocacy Loyalty happens when all this works well together. That’s when you have a customer who is a brand ambassador – they will look first to you for products and services which they need and you can provide, while urging friends and family to buy from you too. A person’s lifecycle repeatedly cycles through potential customer to existing customer, repeat customer and lifelong customer. It’s not about one transaction; it’s about lifetime value and creating a loyal customer.
Customer lifecycle management is key to customer experience
The real challenge to customer lifecycle management is that it can be hard to keep the customer in mind. The sales department, customer service and operations all have their own KPIs, goals, success metrics and priorities. People can get so focused on their own jobs and metrics that they forget about the customer. That’s why a company with high scores in each individual department can still lose customers. A customer lifecycle management process has to have the technology to keep current data, interpret it and act on it at each stage in the customer journey. Marketing automation and CRM software need to provide access to customer data that can inform customer retention behaviour at every stage.
A customer lifecycle management process has to have the technology to keep current data, interpret it and act on it at each stage in the customer journey.
As one Forbes Business Development Council member wrote: “Critically, organisations must support customers where and when they are. If a lead is ready to become a customer, marketing must be ready – both operationally and technologically – to seamlessly move that person to sales. Similarly, if a customer has a sales query via live chat that customer service isn’t equipped to answer, it must be empowered to get someone on the conversation who can. The customer experience will suffer if customers don’t get the support they need in a timely and direct way.” The solution is data. It’s crucial to make sure the technology different departments rely on provides them with the same picture of who the customer is and what they need. The newer term for this is RevOps; customer lifecycle manager is another common title for the person who breaks down silos and provides the company with a clear view of the customer.
It’s crucial to make sure the technology different departments rely on provides them with the same picture of who the customer is and what they need.
Think of a restaurant: It makes little difference if the person in charge of procurement, the chefs and the waiting staff are all doing great if they forget to find out whether the customer is ready for the next course or needs some water.
When customer lifecycle management goes wrong
Of course, nobody gets it right 100% of the time. But if a company finds it is losing customers – and remember, customer acquisition is both costly and competitive – the first place it should look is the customer data. Here are some steps to take when customer lifecycle management isn’t getting you to the customer loyalty stage:
If a company finds it is losing customers... the first place it should look is the customer data.
- Walk through the customer journey, from the customer’s point of view.
- Make note of how customers interact with the touchpoints as they go.
- Anticipate the customer’s needs, expectations and desires during each part of the journey.
- Build an understanding of what is working and what is not. Is there something wrong with the shopping cart function or are customers having trouble finding what they need?
- Set priorities for the most important gaps and opportunities to improve the journey.
- Get serious about fixing root-cause issues and redesigning the journeys for a better end-to-end experience.
Customers like knowing that you’re committed to them. Customer lifecycle marketing communicates that your focus is on being there through every customer lifecycle stage. By harnessing customer data and making it accessible to everyone who needs it, you can build a seamless customer lifecycle management process that will boost retention and drive long-term revenue.