Customer Experience Lifecycle - create experiences that wow customers

Picture this:

It's date night, so you and your spouse have a reservation for a newly opened restaurant.

Right out the door, a friendly host greets you, leads you to your table, and ensures she's there should you have questions about the menu.

The food? Delicious, culinary bliss.

When you sign the check, the manager comes to your table and asks about your experience. You thank her for the delicious food and get a complimentary dessert as a thank you for choosing the particular restaurant.

On a scale from never to obvious, how likely are you to recommend this restaurant?

This scenario translates into the customer experience lifecycle in your eCommerce business, creating a memorable journey that delights customers at every touchpoint.

Is it something you might be interested in?

Today's article explores the various stages of the customer experience lifecycle and provides practical tips and examples to help you enhance your customers' journey and boost your business's success.

Let's ride!

What is the Customer Lifecycle?

The data-driven approach to customer lifecycle management is called Customer Lifecycle Analytics, and it's the process of using your customer data to pinpoint the crucial points at which your customers have engaged with your products or services.

An easier way to understand the customer lifecycle is to think of it as the journey someone takes as they progress through the sales funnel.

Understanding and controlling the lifecycle of your customers allows you to create content for lead generation and orchestrate more relevant experiences that keep people happy and engaged throughout the entire customer journey.

Customer Lifecycle Stages

There are five customer lifecycle stages, as explained by digital marketing and analytics experts Jim Sterne and Matt Cutler.

According to these stages, contrary to popular belief, we can infer that the relationship between a customer and a brand doesn't end when the sale is made. Instead, that is just the beginning. The ultimate brand goal is to create a foundation for customer loyalty and turn loyal customers into brand ambassadors.

Here's how the customer experience lifecycle works in terms of stages and how you can influence each one to increase your overall Customer Lifetime Value.

Stage 1 - Awareness

In the first stage, the potential customers only learn about your brand.

It's the step before the blind date when someone enthusiastically tells their friends about you.

Or the first Social Media post your prospect sees on your page.

Or maybe the first time he clicks on an ad and lands on your website.

In the awareness stage, your goal is generating interest in your brand and encouraging prospects to visit your site (or your offline store), guiding them toward customer acquisition.

However, bringing on traffic for the sake of traffic won't do you much good.

Research your target audience and use your zero and first-party data to create custom lookalike audiences that most resemble your best customers the most. This way, you'll ensure your traffic and ad spend will be well-spent.

Stage 2 - Acquisition

If your marketing strategy worked, prospects are in the checkout stage, ordering your products.

It's the blind date - prospects turn into customers with the hope that your products are "the one."

As long as you focused and gave enough attention to the awareness stage, only suited prospects should have reached the acquisition milestone.

The more limited your resources are, the less you can afford to acquire low-value customers who aren't bringing in more earnings than your acquisition costs.

To avoid high cart abandonment rates, ensure the purchasing process is as easy and smooth as possible.

Moreover, you'll increase your chances of conversion if you give financing options to your prospects multiple delivery alternatives and provide reviews and social proof to clear objections from customers' minds.

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Stage 3 - Onboarding

Is the job over?

No.

The next stage is onboarding; you're guiding your existing customer into earning the most value from his orders.

Remember - the sale is over only when the customer has achieved progress with your help.

In the onboarding stage, you should provide customers with any necessary info about the product and ensure that the customer has a positive experience.

This is always the time to talk to your customers: do they like the products? Will they share their feedback? Would they respond to an NPS survey?

In a nutshell, ensure customers use your product in a way that ensures they're reaching the desired outcome.

Stage 4 - Retention

Here's the tricky part.

The stage where most brands fail, some not even bothering to try.

Retention is getting to know each other, steady-going; it's the quick reply to texts and always asking you out for another date.

Now you have to focus on customer satisfaction, keep customers engaged, and encourage them to make additional purchases from your brand.

Use NPS surveys and closely monitor the customer journey to find any possible friction point, then fix it. Leverage your data to create loyalty rewards, personalized recommendations based on past purchases, or exclusive deals for repeat customers.

There's much to say about retention, so check out our Customer Value Optimization articles to uncover more in-depth retention strategies!

Stage 5 - Advocacy

The final stage is advocacy: when loyal customers are satisfied with their experience, they tell their friends about you.

It's the wedding - getting in front of people and declaring your love publicly.

You can turn loyal customers into brand advocates with referral programs.

Be strategic about it. Wait until the person is a regular buyer and becomes a power customer. Since they already love your products, they're great candidates for a referral program.

It's your job here to encourage the customer to spread the word about you and help bring in new customers.

Benefits of Customer Lifecycle Mapping

Ok, but why? Why should you invest in controlling and influencing your customers' experience lifecycle?

Here are the main benefits of it; coincidently, these benefits are also the ultimate goal of small to medium brands looking to grow in today's ultra-competitive world.

• Improved customer retention

Since retention is one of the lifecycle stages, this is obvious.

However, companies are somehow oblivious to customer retention and still over-rely and over-invest in the awareness and acquisition stage.

A clear customer journey overview ensures that customers are satisfied at every touchpoint and are more likely to stay loyal to your business. At the same time, a relevant retention strategy will increase customer engagement, keeping people more involved with your brand.

• More customer referrals

Some customers don't even reach the advocacy stage, getting lost because brands aren't that interested in retaining them.

Yet, when your care about customer relationships through every lifecycle stage, you get more people to the referral point; more satisfied customers equals more referrals, which can help expand your customer base without additional marketing costs.

• Competitive edge

People stay with your brand for two reasons: the quality of your products and the relevancy of their experiences.

Investing in the customer experience lifecycle, you can create memorable experiences that set your brand apart from competitors.

• Higher revenue

Customers staying with your brand over a more extended period + additional customers brought through referrals means more purchases and higher revenue.

In fact, studies show that the average revenue earned through referrals can rise to $115k per year. At the same time, a 5% increase in retention by 5% can increase profits by as much as 25%.

• Cost savings

Retention costs 5x less than the acquisition, so excellent customer experiences aren't great for the customer alone - but for you also.

At the same time, satisfied customers aren't as likely to send tickets to customer service or return products, so you will also save time and money on that front.

Investing in customer lifecycle management will earn you brand recognition, a better reputation, and more satisfied customers, saving you time and money in the long run.

Conducting a Customer Lifecycle Analysis

Are you convinced and sold on the idea of customer experience lifecycle management?

Amazing.

Now let's see how you can use your data to analyze your customer base and improve it across every touchpoint.

• Define the stages of your customer lifecycle

Maybe your customers go through all five stages. Or perhaps you want to check what happens after the acquisition and how effective your onboarding processes are.

Whichever the case, the first step here is defining the stages (or milestones) of your customer's journeys.

• Identify the key touchpoints

Now it's time to identify where customers interact with your brand.

This means creating a list with all touchpoints or entry points customers go through at each lifecycle stage.

Think of website visits, newsletter subscriptions, purchases, or even tickets sent to your customer service teams via email or phone.

• Gather data

Now that your entry points list is complete, you must gather customer interaction data at each touch point.

Chaotic reporting will lead to an inaccurate assessment of your current situation. Still, this step allows you to avoid that trap.

Use website analytics, sales data, customer surveys, or customer service logs to get insights into customer behavior, preferences, and pain points.

• Analyze your data

Now it's time to analyze the data from the previous step to identify patterns and trends in customer behavior.

Look at areas where customers get stuck (for example, high cart abandonment rates signal issues with the checkout process; high churn is a sign of faulty retention practices, etc.)

At the same time, find opportunities to upsell or cross-sell, set up referral programs, or simply talk to your customer more.

• Draw conclusions

Use the insights from your analysis to reach your conclusions and develop data-driven recommendations for improving the customer experience and increasing customer lifetime value.

Usually, this stage comes with insights that involve changes to your website, tweaking the product offerings, or upgrading your customer service processes.

It's a matter of looking at customers' behavior throughout their lifespan, then adapting your processes to anticipate and meet customer needs better.

• Implement changes and measure your results.

The final step is action time.

Take all your recommendations into account and implement them in your business.

This step isn't instantly, as it might take a while, so prioritize revenue-generating ideas or issues that cause the highest customer churn rates.

After the implementation, you need to monitor the adjustments, measure your results, and make further changes if required.

Customer Lifecycle Management

Who is responsible for your customers' experience lifecycle?

The Customer Lifecycle Management department - or at least an assigned individual who will own this project.

Managing the customer lifecycle is a process in itself, following these steps:

Step 1 - Find (and Validate) the Ideal Customer Profile

As with any other marketing process out there, CLM also starts with the research phase.

In this stage, you must look at your data to identify your Ideal Customer Profile (ICP) and understand who this person is.

The ICP is someone who:

• Needs your products
• Can afford them
• Buys them regularly and achieves progress with your help.

In terms of gathering data that helps you understand your customers, look at the following:

• Demographics data (age, gender, location, etc.)
• Buying behaviors (RFM data)
• Pain points (identified through surveys or interviews)

Step 2 - Create the customer journey

(a.k.a. buyer's journey or purchase journey)

Based on everything you learned about the ICP and other customer segments, map their journey across the entire relationship with your brand.

Step 3 - Decide on your goals

Creating a customer journey map isn't enough, as each stage can come with specific objectives for your customer lifecycle strategy.

For example, your CLM goal might be building brand awareness to get the attention of additional prospects, building trust with your new customers, or reducing the churn rates.

To monitor your performance and enable you to track your progress, you can look at the following metrics:

• Website Traffic
• Engagement
• Social media followers, comments, mentions, and shares
• Net Promoter Score (NPS)
• Conversion Rates
• Average Order Values
• RFM analysis
• Churn Rates
• Customer Lifetime Value

Step 5 - Help customers to speak with you across all touchpoints

Should any issue arise in the customer experience lifecycle, you must provide clear means of contact to help customers solve these issues.

For example, you can provide social media support, website chat options, or feedback surveys to ensure you're always in contact with your customers.

Step 6 - Orchestrate personalized experiences

Tailor your communication and provide exclusive promotions relevant to specific customer groups.

While personalization is crucial in retaining customers, leveraging this information to upgrade the overall customer journey is equally beneficial.

Analyze audience demographics and customer behavioral data using data analytics tools to create specific experiences, enhancing the customers' experience.

Wrap Up

As we're reaching the end, it's important to mention that managing the Customer Experience Lifecycle isn't a one-time task.

Your business isn't limited to promoting and selling products; building relationships and creating value is always part of the bargain.

Now it's your turn to take a step back and analyze your customer experience journey from start to finish.

Are there areas that could be improved? Are there touchpoints that could be better aligned with your customers' needs and preferences?

Use what you learned today to enhance your customer experience strategy and create a journey that genuinely wows your customers.

Frequently Asked Questions about the Customer Experience Lifecycle

What is the customer experience lifecycle? The customer experience life cycle refers to the various touchpoints a customer has with a company, from initial contact to the purchase and brand advocacy.

The customer experience life cycle refers to the various touchpoints a customer has with a company, from initial contact to the purchase and brand advocacy.

What are the 5 stages of the customer life cycle? The five stages can differ depending on the company, but they generally include: Awareness - the prospect becomes aware of your company and its products or services. Acquisition - the prospect decides to purchase the product or service. Onboarding - the now customer is guided to extract as much possible value from the product. Retention - the customer continues to use the product and may become a loyal customer. Advocacy - the customer becomes a brand advocate and recommends the product to others.

The five stages can differ depending on the company, but they generally include: Awareness - the prospect becomes aware of your company and its products or services. Acquisition - the prospect decides to purchase the product or service. Onboarding - the now customer is guided to extract as much possible value from the product. Retention - the customer continues to use the product and may become a loyal customer. Advocacy - the customer becomes a brand advocate and recommends the product to others.