When you have access to customer data for every stage in the buyer journey, you are able to manage your customer lifecycle better. Therefore, it is important for you to understand the key difference between the buyer journey and the customer lifecycle, so that you can cater to your customer pain points and deliver a positive customer experience every single time.
With this guide, we will dive deeper into what customer lifecycle is all about, how it differs from a buyer journey and how customer lifecycle management can help you scale your business.
What is the customer lifecycle?
A customer lifecycle is an overview of the customer journey from the perspective of your business. It encompasses every touchpoint when your business interacts with a customer – right from introducing yourself to your audience via brand awareness campaigns, all the way to building a loyal customer base.
Customer lifecycle and customer journey may be used interchangeably but they refer to different aspects of the relationship a customer shares with your business. The customer journey is the path followed by customers through the stages of their relationship with the company. This includes all the interactions between the customer and the business across multiple channels while the customer lifecycle is a framework to understand the progression of a customer in the buyer journey.
The stages of the customer lifecycle vary for each company, but simply put, they typically consist of finding a lead/prospect, engaging with them to make a sale, with the intention of turning them into a customer.
What are the 5 stages of the customer lifecycle?
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1. Awareness:
Making your audience aware of your products/services is the first step to customer success. Awareness is a customer-driven process where you need to identify a customer need and attract your target audience by presenting a solution that fulfils that need. This solution may include a list of services/products you offer or vendors you partner with.
2. Evaluation/Consideration:
Once your prospect is aware of your brand, product or service, they start evaluating your solution against other solutions they might have come across. Which of these solutions solve for their critical needs? Which channel do they intend to buy through? Is it easy to use, flexible and affordable? It may take follow-up sessions, a few calls, or some notes that highlight customer needs, to help customers lock down their options.
3. Purchase:
The purchase stage of the client lifecycle brings in revenue for your business and puts the customers at ease because once you establish trust with your customers, they are likely to invest in you if you continue to provide solutions for their evolving needs. With businesses reaping the benefits of their investment, it’s advisable to nurture a pool of existing customers who can continue to bring in the revenue.
4. Customer Retention:
Once a purchase is made, the customer experience that follows plays a critical role in how customers perceive your post-purchase service. You need to be available across communication channels with the right resources, to resolve any customer query that may come your way. This helps you ensure that your customers have a positive service experience and choose to stay connected with your brand.
5. Loyalty/Advocacy:
Once you successfully retain your customers, you need to turn them into your brand champions. If you are unable to nurture a pool of loyal customers, you may want to analyse each of these stages and identify factors that may influence your customers directly. You may even ask your customers what you can do to secure their advocacy. Use customer-facing feedback to engage with your customers and take steps towards improving their overall customer satisfaction.
Every customer progresses through these five stages of the customer lifecycle. You can take control of these stages by using customer lifecycle management to create a loyal customer base and grow your business exponentially.
What is customer lifecycle management (CLM)?
Customer lifecycle management (CLM) refers to the process of monitoring, managing and optimizing every stage of the customer lifecycle in order to facilitate personalized customer journeys, reduce churn and promote customer loyalty.
Customer lifecycle management is a framework that allows you to dive deeper into your customer data, map out your customer journey, analyse key metrics like customer lifetime value (CLV) to meet customer needs and optimize the performance of your business.
What is customer lifetime value?
CLV refers to the total revenue that a customer brings or is likely to bring to your business across their entire relationship with your business. It measures the total profits that your company makes from a single customer and is calculated as the difference between the total revenue earned and the initial costs invested in acquiring/onboarding a customer.
Why is customer lifecycle management important?
In order to stay competitive, it’s important to understand how you’re delivering customer experience as compared to your competition. Small and medium businesses may test out different strategies and pick and choose which areas of the customer experience to focus on but organizations in mature markets generally adhere to a certain standard.
Mature marketplaces refer to a wider variety for consumers. This means that if you lose a customer on account of poor experience or low customer satisfaction, they can easily switch to other options. This is why customer lifecycle management is integral to ensuring a high customer lifetime value. All you need to do is to determine the health of customer accounts, check the status of your relationship and track customer lifecycle metrics across touchpoints, to detect early signs of churn.
CRM vs CLM
A CRM and a CLM complement each other to drive business results by personalizing customer journeys. Customer Relationship Management software captures customer data and enables you to build a relationship with your customer by delivering seamless customer experiences.
While the Customer Lifecycle Management (CLM) software tracks a customer from their first interaction with your business and continues to do so till they stay with your brand. The Customer Lifecycle Management software captures data around the stages of the customer lifecycle and customer needs, so you can meet customer expectations at every stage.
While a CRM helps you build and nurture customer relationships, a CLM helps you leverage that relationship to get more business, referrals, and brand advocates.
How to create a customer lifecycle management strategy?
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Identify your target audience
Before your customers discover your brand, products or services, determine who you’re trying to reach. Identify a target audience and identify the customer needs which you can fulfil. This approach will enable you to create relevant resources that meet customer expectations at every touchpoint.
The best way to define your target audience is to create a buyer persona. Buyer personas represent the demographic and behavioural characteristics of your customer base. You may assign names, stories, and even hobbies to each of your persona. Remember, these personas may be subject to change as your customer needs evolve.
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Create and share the right resources
Once you create your buyer persona and identify your customer segments, you can now understand your customer needs and desires. This leads you to the next step of your customer lifecycle strategy.
Create relevant content around your products and services for customers who might be interacting with your brand for the first time. You may further link these pages to suitable support articles that assist customers on how to make the most of the featured capabilities to solve their issues.
You can even create and share content in different formats like case studies, webinars and testimonials so your customers can invest their trust in your business. Once you get a customer on board, analyse their behaviour and share resources that may help you upsell/cross-sell your products to these customers, to generate more revenue.
Self-service makes it easier for potential customers to learn and interact with your brand without the need to engage with a customer support agent.
Make sure you create a knowledge base, host an FAQ page, enable chatbots and community forums that offer as much information as possible to your customers. It has been established that customers like to be in complete control of their journey, so ensuring that they have access to the right resources to educate themselves will further increase the possibility of doing business with you.
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Offer proactive customer service
You have identified your customer pool, created the right resources and enabled self-service at this point. However, some of your customers still have questions about your product or your company. If you’re unable to bridge the gap and resolve their queries, it can lead to churn or even the possibility of potential customers walking away from a purchase.
You need to train your customer service team to proactively engage with your customers to resolve any queries, assist them through their purchase decision, and even offer them trials or demos to familiarize them with your products. Proactive customer service not only boosts your brand reputation but improves customer retention.
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Simplify customer support through app integrations
App integrations enable your customer support team to work with multiple data sets and get a complete view of customer context from a single dashboard. By merging and optimizing customer data and workflows, customer support teams can work seamlessly with other teams to respond to customer queries proactively, without the need to toggle between multiple apps.
For example, you can integrate your Shopify store with your help desk software. This allows your customer support agents to engage with your customers effortlessly, no matter which channels they choose to communicate. Instead of moving from one app to the other, agents are able to access customer data within the help desk and ensure a seamless shopping experience for customers, encouraging them to confirm their purchase and check out safely. Once they have a positive experience with your brand, they are more likely to become your repeat customers.
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Personalize the post-purchase experience
You need to personalize customer experience across every stage of the customer lifecycle. Remember to guide and be available for your customers after they’ve made a purchase. This is an important step to improve customer relationships and turn existing customers to repeat customers.
You need to ensure that your customers feel as heard and valued post-purchase as they felt pre-purchase. Follow up with your customers to let them know you are around if they need any help. From setting up an automated email system to thanking customers for their orders, small gestures like these can nurture a pool of loyal customers. You can even reach out to your customers to confirm if they are happy with their purchase experience and the quality of the product/service.
As your customer base grows, you will need to scale your efforts to keep up with customer demand. This is where automation comes into play. When you automate complex workflows and let AI do the heavy lifting, you are able to monitor every customer interaction closely to stay updated about any changes in customer behaviour, prioritize customer requests based on the urgency and redirect customers to the right resources to continue their journey.
For example, you can set up a workflow that automatically triggers an email to your customer if they abandon an item in their cart or if the item on their wish list is now available at a discounted price or if they have just completed their first purchase with you. A steady line of communication with your customers helps you maintain an active relationship with them and makes them feel valued at every step of the way.
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Encourage customer feedback at every stage
When you go above and beyond for your customers to make their experience worth their time and effort, all they need is some encouragement to share the good word about your brand. Happy customers are willing to share about their experience if you make it simple for them to do the same.
You can email them a short survey once they complete a purchase, or share a link with them that redirects them to your Google reviews site. You can even offer them a discount coupon for rating their experiences or sharing a referral to try your brand. By collecting customer feedback from time to time, you will be able to understand their latent needs, the gaps in your services and leverage these data points to redesign your customer lifecycle.
You can follow the steps mentioned above to ensure you create a holistic client lifecycle management strategy. We have also compiled a few best practices in customer lifecycle management to help you deliver the best customer experience possible.
What are the best practices in customer lifecycle management?
Customers like knowing that you’re committed to them. Customer lifecycle management assures your customers that you intend to be by their side through every stage of the client lifecycle.
- Walk through every stage of the customer lifecycle, from the customer’s point of view.
- Monitor and keep tabs on how customers engage with you across multiple touchpoints.
- Interact and unearth customer needs and latent desires during the customer journey.
- Interpret your customer behaviour and get an understanding of what works and what doesn’t.
- Prioritize to bridge the gaps and redesign your customer journey to improve customer engagement.
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 customer retention and drive long-term revenue.
Grow your business with CLM
Every organization approaches customer lifecycle management differently. For example, a prospective customer should not receive the same communication resources as a long-term, valued customer. You can craft a lead nurture campaign using personalized messaging for former customers or you might cold call potential customers and target them with resources like an e-book.
Just remember that your customer lifecycle management strategy will differ based on the type of your industry.
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