How to create an impact driven customer lifecycle management strategy

What is the meaning of customer lifecycle in business?

Customer lifecycle, from a business perspective, refers to the various stages and touchpoints that prospects and potential buyers go through as they gradually evolve from curious visitor to engaged customer and finally a loyal brand advocate. The customer lifecycle starts from when a prospect first becomes aware of a product, and continues up until the time they last engage with the brand.

Capturing these relationship phases in a structured flow – what customer lifecycle management is all about - allows organizations to create customer acquisition and retention frameworks which decisively influence various business functions such as strategy, planning, marketing, operations and sales.   

What is the significance of customer lifecycle in business?

The customer lies at the heart of a business. Companies make 60% more money by focusing on their customers, while customers who feel connected to a brand are worth 306% more over their lifetime to the business. Businesses therefore need to know as much as they can about their customers, so that they can serve them better. In an increasingly complex buyer-seller environment though, that’s easier said than done. Empowered with digital discovery tools, pressurized by market trends and  i nfluenced by personal networks, modern customers suffer from information overload and juggle with multiple confusing options at any given point in time. Their conduct, not surprisingly, is not easy to predict. This is where a customer lifecycle framework comes to the rescue.

Customer lifecycle: Helping revenue and sales leaders aim at an ever moving target.

For business leaders, a customer lifecycle framework can be a heavensent, generating otherwise-hard-to-access visibility into the mysterious workings of the customer’s chaotic inner universe. In practical terms, it stiches together moment-by-moment snapshots to create a time-lapse type summary of the attitude, moods, choices, challenges and decisions customers experiences at every step of their experience arc with the business.

In doing so, the customer lifecycle establishes an evidence based framework for a foundational level understanding of the customer - be it their background, motivations or purchase patterns -  while keeping room for layers and variance. In hunting terms, not an entirely inappropriate symbolism, a customer lifecycle framework holds the turbulence down for a moment of stillness, allowing leaders to take aim at an increasingly elusive and compulsively moving target. 

How does a customer lifecycle framework help?

A customer lifecycle framework throws light on important success indicators such as customer behavior, Go-To-Market activities and touch point engagement, letting leaders get a sense of the kind of strategy, resources and time they require for smart business development, customer experience (CX) and sales decisions. In an omnichannel age, customer lifecyle should be sufficiently agile and flexible to accommodate non-linear buyer journeys.

What is the difference between customer lifecycle, customer journey and conversion funnel?

The terms are often used interchangeably in commerce, which can be misleading. Each  carries a distinct connotation. In essence, here’s how they differ:

Customer (or buyer) journey is controlled by the customer. It traces the choices they make and the paths they take.

Customer lifecycle is controlled largely by the business, but is also influenced by the customer. While customer journey is the reality actually unfolding on the ground, customer lifecycle is a purpose led framework that tries to influence and engineer that journey consciously to meet predefined objectives. That’s just half of it, though. The customer lifecycle also decodes and learns from the customer’s actions in real time, relentlessly refining the premise and hypothesis that supports the framework.

Consider customer lifecycle as the observable, generated view of conduct and actions generated by both sides -  customer and company - as the bilateral relationship continuously unfurls and progresses.

The conversion funnel can be interpreted as a subset of the customer lifecycle. It has a specific beginning (top-of-the-funnel attention) and end (bottom-of-the-funnel conversion). The full customer lifecycle, however, may extend further on either side: From even before the first impression, to recurring purchases, to customer loyalty.

What are the various stages of a customer lifecycle?

While there can be multiple ways of interpreting the path of customer relationship, most businesses today tend to follow the five stages – or a close variation of them - outlined by Jim Sterne and Matt Cutler in their 2000 paper, “E-Metrics. Business Metrics For The New Economy.”

These five states of a customer lifecycle are:

·   Awareness and discovery.

·   Engagement and consideration.

·   Conversion and purchase.  

·   Recurring and retention.  

·   Loyalty and advocacy.

What is customer lifecycle management?

Each of the five stages in the customer lifecycle influences not only the next, but also the overall buyer arc profoundly. As they pass through the five stages, a buyer’s perspective and sentiments towards the company and its products may shift significantly. To track these changes as-they-happen, measure how they impact the overall customer lifecycle, and influence them wield   them control them to  enforce intended outcomes, companies typically develop various performance frameworks and success metrices. They all come together to create what we call the customer lifecycle management.  

Defining customer lifecycle management.

Customer lifecycle management is the process of continuously optimizing and amplifying the customer lifecycle with a view to justifying effort and maximizing outcomes.

If customer lifecycle is a relay race, customer lifecycle management dives into the nitty-gritties of its five stages, ensuring each is performing at peak efficiency and flowing seamlessly into the next.

Customer lifecycle management goes beyond individual transactions and one-off wins to take a holistic overview and long term approach to relationship nurturing.

It tries to crystallize what’s working into actionable, ready-to-use templates that can help the business attract new customers, ensure recurring value from existing customers, and grow the business sustainably.

With data and inputs from market trends, marketing campaigns, listening tools, customer surveys and frontline sales folks who deal directly with customers, customer lifecycle management attempts to identify bottlenecks, address gaps, eliminate friction and empower resources towards customer success targets.

The ultimate goal is to fine tune approach and processes unrelentingly to create an interconnect, addictive and profitable customer arc that rewards both the brand and its fans.

Some questions a customer lifecycle management strategy wants to answer are:

·   Is the business attracting the right crowd into its cycle? In other words, a demographic whose painpoint are reasonably aligned with the products and solutions the business has to offer? If not, the customer lifecycle will witness a high drop off ratio.  

·   Has the business identified and prioritized the platforms where customers are currently engaging? It’s best to start from what’s already working and amplify.

·   What are the specific pain points and challenges that visitors and prospects are looking to solve?

·   Has the business designed a welcoming and conducive ecosystem, with helpful tools, guardrails and resources, that helps prospects navigate and discover the various solutions the business has to offer?

·   Do customers understand the business space and the solution category clearly?

·   Are customers taking away a positive memory – it doesn’t necessarily have to be a purchase – from their interaction with the brand, one that may make them return or recommend the business to others?

·    Are there systems and technologies – with appropriately trained manpower – to monitor, capture, collect feedback, measure impact and plough back learnings to create a better lifecycle for the next customer? 

Why is customer lifecycle management important?

Knowledge is the ultimate edge in commerce. As customer experience (CX) emerges as a make-or-break, businesses are becoming increasingly customer centric. Customer lifecycle management becomes extremely important in that context, as a tool for sales and revenue leaders to decode customer behaviour patterns and understand users better. An effective customer lifecycle management isn’t one-size-fits-all: It is informed by the nature and status of the relationship the business has with a certain customer at a specific point in time within a particular stage of the lifecycle. A winning customer lifecycle management strategy tries to evoke the right feelings in prospects and nudge them to take a desired and pre stipulated action. It creates relevant, efficient and sticky moments that attract, engage and retain customers for the business. 

Benefits of customer lifecycle management.

Done right, customer lifecycle management helps an organization:

·   Align operations, marketing and sales with grand business goals. 

·   Get a better grip over each activity with evidence based planning and data driven decisions.  

·   Add accuracy to strategy, planning and forecasting.

·   Create rewarding customers experiences that convert visitors into users, and users into true fans.

·   Lower Customer Acquisition Cost (CAC).

·  Increase Customer Lifetime Value (CLV).

·   Lift ROI with more efficient investments and by reining in costs.

·   Build brand equity and stakeholder value. 

How to create a customer lifecycle management strategy?

Here are some tactics a business can employ at each stage to manage its customer lifecycle with agility and efficiency. 

1. DISCOVERY AND AWARENESS. 

As prospects walk into this stage of the customer lifecycle process, they may be entirely unaware, or partially aware, of three things: (A) The problem, (B) the solution, and (C) the product or the brand. In a time of shrinking attention span and increasing touchpoint diversity, brands have a very limited window of opportunity to make a memorable first attention at the discover or awareness stage of their customer lifecycle management. The good news is that the slate is practically blank for both parties, which means the opportunity to experiment – and hit a winning path that offers increasing returns to scale at least during the initial period - is huge.

By tweaking variables such as age, gender, location, income, interests and background, companies can elevate the awareness stage of their customer lifecycle management process with minutely targeted campaigns and outreach. Sieved through analytical filters, A/B tests can tell us what’s working and what isn’t.

This is the time to tap into check-out type listening posts, sign-up and registration forms, polls, surveys and social comments to collect valuable feedback.

Find out how and from where prospects heard about you, what their current perceptions and expectations from the brand are, their struggles, ideas they might be open to, whether they would like to opt-in for some of your content (such as a newsletter or youtube channel) that’s aligned with their interests, and so on.

Organizations typically make use of TOFU (Top Of The Funnel) approaches such as digital PR, search engine optimization and advertising to attract and educate first-time prospects about the solution promise at the awareness stage of their customer lifecycle management process.

Some go-to tactics here are high quality educational content such as blogs, social media, referrals, video, webinars, podcasts, e-books, white papers and events.

Success metrics and KPI’s here are unique visitors, click through rate, social media engagement, downloads, brand mentions and media coverage.

2. ENGAGEMENT AND CONSIDERATION.

After TOFU, this is the MOFU – Middle Of The Funnel – stage. At this stage of the customer lifecycle management process, prospects are stepping beyond the first Hello to weigh your product through a more critical lens. They are evaluating it from several angles, comparing it with alternatives available in the market, and researching about it online - to see if there is a genuine alignment and fit.

As a brand, you are not just educating a potential user group at the consideration stage of the customer lifecycle management process. You are also engaging them by sharing values and displaying character, trying to establish green shoots of trust. Brands who play on personality will try to showcase charisma and quirk now. This is a good time to invite prospects to join communities owned by the brand to leverage tribe dynamics, establish exclusivity and evoke aspiration.  

It is not uncommon for prospects to discover  needs, desires and associations at the consideration stage which they were not aware of earlier, marking a parallel opportunity for companies.

The potential customer is clearly asking questions at this stage, so the task for the business is cut out: Answer them. Supply specs, stats and deets, so that prospects can form an opinion and take an informed decision.

Brand pages, specifications sheets, product demos, buying guides, how-to content, tutorials, unboxing videos, long form videos, blog articles by subject matter experts and product team specialist, FAQ lists, troubleshooter manuals, classes and workshops, comparison charts, alternative posts (for those looking for something better), interactive tools like calculators and assessments, anecdotal stories, landing pages, case studies, white papers, research reports, reviews and ratings, testimonials of users, smart chatbots, DIY templates, quizzes, push notifications, personalized messages, DMs and customer support can all variously whet the prospect’s appetite for clarity and information at this stage of customer lifecycle management process.

Keep in mind that prospects may like to revisit content from the TOFU stage for a deeper understanding of features and benefits, hence the importance of creating a high quality content library right at the outset.  

Success metrics and KPI’s here are campaign and landing page engagement rates, email open rates, click-through rates of various content, participation rates of classes and webinars, and so on. 

3. CONVERSION AND PURCHASE.

Prospects who enter the conversion stage of the customer lifecycle management process have stuck around long enough to prove genuine interest in the product. They have done their research, and seem to be fairly satisfied with the solution you are offering. All they need now is a final burst of conviction to cross over the finish line. The job for the marketing team (or whoever is  managing the show) is to find out what, exactly, is keeping them from doing so.

Be patient, though, as you load the icing on the cake and go about sealing the deal: Research has shown that it takes about 8 touches to get through and generate a conversion. Welcome to the BOFU – Bottom of the Funnel.

Maybe they are considering a rival’s alternative? Do they expect a last-minute sugarcoating like product bundling or a discount? Could a compelling customer success story video do the trick? Should you invite them to a follow-up demo or presentation? What about a free sample?

Anticipate the concerns and mind-blocks your prospects could be harboring at this point. This is a time to be specific, drop numbers and be direct. Analyse flags like cart abandonment and have a chat with customers on whatsapp, DM or social media to understand why and where drop-outs are happening. Ask for feedback. Share social proof. Clarify pricing. Update TOFU content with an attractive proposition and an unambiguous CTA (Call-To-Action). Custom-create an exclusive, deeply personalized and ‘limited time’ offer to build FOMO and encourage immediate action.

Insider tip: Studies reveal that while 50% of marketing professionals actively generate TOFU material, only 14% of marketing professionals prepare BOFU content. A delicious appetizer without a main course is an opportunity lost, and stresses the importance of a balanced content strategy in customer lifestyle management.

Success metrics and KPI’s here are conversion rate, customer acquisition cost (CAC), customer lifetime value (CLV), lead to conversion ratio, bounce rate, time on page, click through rate (CTR), average order value (AOV), profit margin, delivery margin, website traffic, customer retention rate and return on ad spend (ROAS).

4. RECURRING AND RETENTION.

As they say in sales, the sale is just the beginning. It serves to open the doors wide to a potentially sustainable relationship that rains benefits for both parties over an extended period of time.

So how do you make customers visit you again? Implementing omnichannel customer feedback and customer engagement loops, prioritizing ongoing support and frequent moments of surprise and delight are the go-to strategies here. This is the stage of customer lifecycle management where companies will typically look to start building a bedrock of long term trust and stickiness.

Ask your customers about their product experience, offer support and custom content to help them make the most of their purchase, make returns and refunds easy, create a customer communications calendar to ensure regular interaction, personalize every message, be quick to respond, identify and nudge dormant customers and re-engage inactive users with reactivation campaigns.

Success metrics and KPI’s here are customer retention rate (CRR), customer attrition rate and customer lifetime value (CLV). 

5. LOYALTY AND ADVOCACY.

This stage represents the ultimate fruition and success of a customer lifecycle management strategy. A relatively small fraction of your customers will end up reaching this stage, but as loyal advocates and passionate evangelists of your product, they are priceless to your brand. To keep them close and cheering for you, shower them with attention, privileges and gifts at regular intervals. Share updates of new launches, get them excited about change with exclusive previews and early access, incentivize loyalty by providing opportunities of earning through referrals, provide access to gated content you normally charge new users for, keep sending thank you notes and meaningful giveaways (passes for special events and shows, unscheduled discounts, free merch), add them to your newsletter, and introduce them to your community where they can connect and celebrate brand love together. All the while, keep a firm finger on their pulse with regular feedback and make customer experience (CX) a non-negotiable success parameter for teams.

customer engagement rate, purchase frequency, average order value, upsell rate, monthly recurring revenue (MRR), net promoter score (NPS), customer satisfaction score (CSAT), reward redemption rate and return on investment (ROI).  

BUILDING AN EFFECTIVE CUSTOMER LIFECYCLE MANAGEMENT FRAMEWORK: BEST PRACTICES.

Being mindful of these pointers will help you create a high performance customer lifestyle management process, and ensure you get the most out of every stage.   

1. Identify and empathize with your target audience.

The hero of your customer lifecycle is your customers. How well do you really know them? The more granular and textured your understanding is of who you are targeting, the more likely you are to appeal to them with the right interventions, content and offers, and the more effective your customer lifecycle management will be. Create an ideal customer profile factoring in demographic traits like geography, occupation, status, habits and hobbies. Document their buying power and purchasing habits. And continuously review their need and fit vis-à-vis your product.

2. Map the customer journey.

A customer lifecycle map is a high level visual instrument that helps the business monitor the footprint of their customers as they pass from point to point. Study prospects and customers as they move through various stages. Analyse their activity and motivations so that you can design appropriate touchpoints, identify new touchpoints, spot disconnect, plug gaps, predict variance, plan self-service, re-assign responsibilities, re-align resources and tweak strategy on-the-fly to control the customer lifecycle proactively, and keep it closely aligned to established goals and desired outcomes.

3. Segment your customers.

Bucket customers according to common attributes such as purchase history, touchpoint preference, age and interests to tailor your engagement strategies and optimize your customer lifecycle management.

4. Build the right KPI’s.

Install signals, flags and indicators at key stages of the customer lifecycle arc to keep teams  informed about efficiency, progress, gains, losses and areas of improvement.

5. Create the right content.

In an age of stiff competition, high quality content is your best differentiator. It helps your audience find you, communicates the product promise in the right tone and manner, builds bridges of emotion and keeps you top of mind.

6. Cross-sell and up-sell.  

Explore cross-selling and up-selling opportunities with customers. Educate them about the benefits of both, and incentivize them with special offers. This expands and enriches the relationship, and aims to maximize customer lifetime value.

7. Enable teamwork.

The customer lifecycle process moves through various terrains and landscapes, with multiple departments and functions in charge of each. While this segmentation enables better targeting and servicing of the customer in each segment, it may also lead to silo-fication. As the custodian of your company’s customer lifecycle management strategy, it is critical that you continually chip away at the wall of moss that will keep building between functions and departments. The idea is to create easy exchange of information – be it leads, spends or anything in between – to keep teams progressing in lock-stop and unison. 

8. Build great customer experiences.

Be it easy to understand offers, prompt support, relevant content, DIY and self-service options, instant redressals, intuitive UX and hassle-free checkouts, focus on ensuring customer experiences moments that are thoughtful and tailored.

9. Pamper your advocates.

KPI’s like Net Promoter Scores (NPS) and Customer Satisfaction Score (CSAT) will tell you who your most satisfied customers are. While they are natural advocates and sources of high quality referrals who require little external push to rave about your product (which they anyway do both publicly on social and in private amongst close circles), you should nevertheless make the effort to leverage them wisely. Invite them for reviews, encourage referrals and recognize them on your official website and social media pages. This is a special bunch that deserves to be recognized with grateful attention and showered with gifts from time to time.

10. Get inspired by the competition.

What are high performing rivals doing right? Investigate, embrace and customize their customer lifecycle funnel playbook to enhance yours, instead of reinventing the wheel.

11. Use the right tech platform.

Given the myriad moving parts involved, managing the customer lifecycle can be a complicated affair. Thankfully, you can turn to an appropriate tech platform to do the heavy lifting for you, which will add simplicity, convenience and control to the equation.

The right customer lifecycle software technology will let you spot hidden signals and cues, allow you to listen and respond with agility and accuracy, extract customer feedback via institutionalized mechanisms at strategic signposts, enable interdepartmental collaboration for organizing, unifying and sharing data, simplify customer support through app integrations, personalize experiences based on learnings, and scale the program effortlessly via automation.

WHAT DO CUSTOMER LIFECYCLE MANAGEMENT SOFTWARES DO?

A customer lifecycle management software is an essential tool in a brand, revenue or sales manager’s arsenal. It helps optimize key stages and aspects of a company’s customer lifecycle strategy such as engagement, conversion, retention, churn and lifetime value. A customer lifecycle management software will typically parse customer interaction, habits and purchase history to inform success KPI’s judiciously. 

What the benefits of using customer lifecycle management software?

The right customer lifecycle management software helps:

·  Refine customer persona.

·  Enhance reach through better targeting.

·  Advice on the right type of intervention and campaigns according to the customer’s position in the customer lifecycle : Right from pre-purchase, all the way to post- purchase, and beyond.

·  Crate campaign branches that shepherd customers through unique paths based on their persona.

·  Throw hints on best content formats to use to boost brand resonance and connect.

·  Tweak customer outreach elements and marketing campaign parameters – such as landing pages, kind of messaging or choice of incentive and reward – for better engagement and conversion.

·  Gather customer review and feedback.

·  Dynamically personalize interactions across the customer lifecycle arc with data driven insights.

·  Capture, nurture and enhance lead quality along the customer lifecycle funnel.

·  Institutionalize retention and advocacy programs for better referrals and customer loyalty.

·   Track, analyse and refine success KPI’s.

·  Generate powerful and precise trend, path and funnel reports that leverage predictive analytics, data visualization and AI recommendations to throw light on important areas like channel attribution, in-app behavior, sentiment signals, purchase intent, purchase triggers, cart abandonment, cohort based segmentation and customer journey mapping, amongst others.

·   Boost tech adoption and information culture across functions and teams with contextual visibility of data, easy to use dashboards, data integrity, unification of data, and data democratization via shared access.  

·   Streamline processes and automate workflows for better scalability with enterprise level features and high volume data capabilities.

·   Free up valuable resources for core tasks.

·   Manage processes quicker.

·   Go to market faster.

·   Enhance quality of strategy, planning and prediction.

·   Seamless integration with the company’s existing technologies and systems like CRM (Customer Relationship Management), CMS (Content Management System), help desk software and others.

·   The customer lifecycle framework grow seamlessly with the business as the customer database expands.

How to choose a customer lifecycle management software?

There are several customer lifecycle management software available in the market. While choosing a customer lifecycle management software, it is important to curb the temptation of falling for the next shiny thing or trying to pack in as many ‘cool features’ as possible. If you are considering getting a customer lifecycle management software soon,  focus on the specific needs of your brand - overarching business goals, nature of the product, type of customer, etc - and the milestones you have set your sights on. Focus on features that are related to aspects like integration, automation, analytics, customer segmentation, flexible third party integrations and API, compliances and short learning curve. 

CUSTOMER LIFECYCLE MANAGEMENT EXAMPLES. 

·   Subscription based streaming content services have AI driven algorithms that parse browsing history to personalize the consumption experience with recommendations and customizations.

·   Airlines companies personalize promos with targeted marketing efforts by crunching traveller data.

·   Several brands use memorable welcome emails – including kits and gifts – to start the relationship off on a memorable note.

·   Companies like Grammarly send reminder emails – reminding users about the software’s special features – to ‘winback’ customers who haven’t engaged with the product in a while.

·   Several companies send notifications on upcoming products and releases, drumming up excitement amongst fans with special introductory offers.

·   UK supermarket giant Tesco humanizes their automated online grocery shopping experience by adding personality to their interactions with customers on social platforms like X.

·   Starbucks thoughtfully allows customers to pay for their coffee even before arriving at the outlet via the starbucks app, helping customers save time.

·   Shoes brand TOMS donates a pair for every pair purchased, tapping into their patrons’ altruistic leanings.

·   R&G technologies pre-empts churn by giving users an opportunity to express themselves via satisfaction surveys, takes action quickly and pre-empts churn.

AMPLIFY EVERY STAGE OF YOUR CUSTOMER LIFECYCLE MANAGEMENT STRATEGY WITH XOXODAY.

RULE THE PRE-SALE WITH XOXODAY PLUM.

SCORE ACROSS AWARENESS, ENGAGEMENT & CONVERSION STAGES.

Xoxoday Plum can take prospects from the first moment of delight to the final minute of purchase through motivation mapped and incentive driven engagement. Incentivize campaign click-through rates, demo downloads, webinar registrations, survey participations, referrals and purchase by choosing from over 10 million physical and digital reward options – including exotic experiences and exclusive offers - that can be effortlessly integrated with your existing systems and customized to resonate with recipient persona across age, background and industry.

ACE THE POST-SALE WITH XOXODAY LOYALIFE.

MASTER THE STAGES OF RETENTION AND LOYALTY.

Convert users into repeat customers, and repeat customers into loyal advocates, with Xoxoday Loyalife. Loyalife lets you simplify complex value chains and fragmented touchpoints, increase cross-sell and up-sell by uncovering actionable insights, and ensure long-term connect with targeted campaigns and personalized offers. Xoxoday Loyalife’s AI driven and scalable end-to-end loyalty infrastructure is trusted by over 5000 organizations (such as Pepsi, AT&T and Mercedes Benz) across 100+ countries and 1mn+ merchants to engineer sustainable gratification for ‘true fans’.