customer lifecycle management
Customer Retention

Customer lifecycle management

Today’s article is all about customer lifecycle management – we’re looking into the definition, its importance and everything we need to know about this interesting subject. So buckle up, we’re taking a ride in the amazing world of customer lifecycle management!

First and foremost, what is customer lifecycle management?

Customer lifecycle management (also known as “customer lifecycle marketing”) is the process by which you break down a customer’s experience with the brand and market advertising for that step in particular.

Depending on the stage the customer is in, the way you address your campaigns and word the messages can make or break your relationship with the audience.

For example, if a customer is just hearing about your product or service, it’s more important to focus your marketing efforts on information, benefits and other details they might need to make a purchase.

On the other hand, if you have a recurring customer, who is already very familiar with the brand, you might want to focus your marketing efforts towards discounts, repurchase reminders and news about any changes in the formula – everything to achieve customer success. 

Why is customer lifecycle management important?

Just like a factory can run smoothly only when every single area is properly coordinated, staffed and informed, so is the case with your clients. Nowadays, more and more people can be reached through the power of the internet, which means more and more opportunities for companies. 

This is all very nice and well, but more people means more obstacles, more desires, expectations and more details to consider about the customer journey when investing in the marketing strategy for your target audience.

Therefore, a customer lifecycle management strategy will accomplish three very important tasks for your business:

  1. Help you understand your customers better, differentiate them according to their buying cycle and help you relate to them on a more personal level;
  2. Save you money and energy by advertising the right things at the right time to the right people – instead of casting a fishing net in the ocean and hoping for the best, you’re fishing at the right time, in the right spot, for the fish you want;
  3. Increase the overall customer lifetime value by increasing customer retention – keeping your customer relationships up and running for a longer period.   
Calculating your Customer Lifetime Value is not an easy job. Hopefully we have a solution that can do this automatically.


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So, how do you create your own effective customer lifecycle model?

To create your customer lifecycle model, we first need to break down this cycle into concrete steps. Afterward, you may proceed to create buyer personas for each one of them and customize your marketing strategy accordingly.

Five main customer lifecycle stages are often used to create the structure of the model:

Acquire
Retain
Increase Value
Cherish
Reactivate

So let’s take a look at each one and determine what they imply.

Acquire – the first step in creating a customer lifecycle is to… bring in customers. This is done by incentivizing people on coming on to your website and making their very first purchase. 

There are two types of people you will likely meet at this stage:

The already engaged – these are the people who visit the website but don’t make a purchase and don’t leave an email for further communication. They are most probably in the first steps of the consumer decision making process. Your purpose here is to secure a communication channel with them to convince them to make a purchase. 

What can you do here:

  • Create email collection banners;
  • Highlight unique selling propositions;
  • Incentivize to sign up with an email in exchange for a voucher on their first purchase.

The loyal visitors – are the people that visited your website, and although they haven’t made a purchase, they did leave their email address, meaning you already have some access to customer data. Your goal is to determine the client to transition from loyal visitor to making the first purchase.

You can do so by:

  • Send an email with fresh sales;
  • Send regular newsletters with best-selling products;
  • Create an onboarding newsletter campaign. 

Retain – the second step of the cycle is to move customers to their next purchase.

In this stage, the two types of customers you will most likely find are:

First-time customers – people who have made their first purchase, for which you will need to offer positive customer experiences to incentivize them to make a second purchase. 

You can do so by:

  • Sending feedback surveys that are transparently awarded with vouchers;
  • Sending emails that promote complementary products to what they purchased. 

Recent customers – clients who have purchased recently and you want to make sure you leave a lasting positive impression on them, since they represent a promising customer base. 

You can do so by:

  • Ask for reviews in exchange for incentives;
  • Offer vouchers for friends and family;
  • Offer the opportunity for reminders.

Increase value – these are customers that have bought several times, so it’s time to start increasing their frequency of buying and the average amount spent per purchase. 

The two types of people in this lifecycle stage are:

Promising customers – the ones that make purchases periodically, but spend little on each purchase. Your purpose is to increase the monetary value of each shopping cart bought. 

The way to do so is by:

  • Upselling them with limited-time offers, vouchers or unique sales;
  • Promote bundle deals to incentivize higher spending. 

Potential loyalists – these are people that do spend often on your website, a good amount of money, regularly. Here your purpose is to make sure you keep them motivated to buy from your brand as long term customers, and increase the frequency of purchases and/or amount spent if possible.

You can do so by:

  • As a thank you for being loyal to your brand, offer priority shipping;
  • Promote bundle deals. 

Cherish – always remember your most valuable and loyal customers how important they are to you. Validation and appreciation are key for keeping them engaged, interested and incentivized to spend more. 

Here, the two categories of people are equally as important but slightly different:

Loyal customers – are the people who spend a lot and are generally engaged in communication with the brand. Your purpose is to keep them happy and interested, while slowly helping them reach the next cycle. 

How you do it:

  • Send gift vouchers with personal notes;
  • Offer more information from behind the scenes: photos with the team, news, etc. Make them feel like in a family setting.

The best – as the name would suggest, these are the best customers you could ever have. They spend a lot, and they spend often. They represent your brand with pride and promote it to their friends and family, At this stage, the most important thing is maintaining the relationship – keep them happy and keep them engaged. 

You do so by:

  • Rewarding them with access to new products and features before the general public;
  • Including occasional gifts with their orders;
  • Offer them extra-attention when calling the call center. 

Reactivate – these are the people that are no longer interested in the brand, are no longer communicating or purchasing. 

In this stage, we have more than two categories of people, which need to be handled with the most care and attention to be brought back.

Former Best Customers – these people used to love the brand and are extremely important for your success. You need to make everything in your power to bring them back to your brand.

You can do so by:

  • Send them store credit that they can use to start purchasing again;
  • Call them and have a chat about what’s made them decide no longer to buy from you;
  • See what it is that they’re displeased with and offer a correction/alternative immediately.

Risky – these people were previously high-value clients that have only recently stopped purchasing. This could be a temporary thing or a definitive decision, you can’t know for sure. Therefore, the best course of action is to act now to keep the ball rolling and not lose indefinitely.

You should:

  • Send them a small gift and a personal note, making them feel appreciated and missed;
  • Send them exclusive offers that might make them feel special and incentivize them to purchase again. 

Needing attention – people in the previously mentioned category “Potential loyalists”, who have recently stopped spending. The course of action is very similar to the previous one, but with less financial investment.

  • Email them to better understand why they’ve stopped purchasing with you;
  • Send offers that are exclusive to this category, but less valuable than the ones for the “Risky” customers.

About to lose – these are people that were never high-value, and they’ve also stopped purchasing. You can invest in reactivating them, but not too much. 

As such, you can:

  • Re-engage them on social media;
  • Use the same methods found in the previous category, but with a smaller financial investment.

Gone – lowest-value customers that have stopped purchasing. These clients deserve some attention, but with as little effort and money as possible, since they are unlikely to return, and if they do so, they won’t make much of a difference for your business. 

  • Send them a reactivation newsletter.

It may be of use to create a customer lifecycle model graphic, to make it easier to visualize. 

RFM and investing your money wisely

RFM is an acronym for:

Recency – how recently a client has made a purchase;
Frequency – how often the client makes purchases;
Monetary Value – what’s the value of each purchase they make.

This analysis tool is used in marketing in order to identify the best customers suited for a given company. RFM ranks clients numerically, in each of the previously mentioned categories, on a scale from 1 to 5. To determine the best client, they would (ideally) score a 5 in each category.

Are you dreaming of calculating your customers’ value faster?
Hopefully we have a solution that can do RFM segmentation automatically and update it in real time.



Take a ride with to get the

full potential out of your business.
(FREE on Shopify)

Customer lifecycle marketing is a great tool, but you have to make sure you invest the right amount of financial resources in the right type of people for your business.

Omniconvert offers all these services and more. By choosing to partner up with a company specializing in marketing, retention and RFM, you save a lot of time and money normally wasted on testing, experimenting and well, mistakes.

With the Reveal service, you know in a very short time where your money should be invested, what types of people are best suited for your business and how to keep them close in the long run.

Would you like your clients stick to your brand? What about increasing your Customer Value? You’re in the right place.


Take a ride with to get the

full potential out of your business.
(FREE on Shopify)

Conclusions

Today we talked about customer lifecycle management (also known as customer lifecycle marketing) – what it is and why it’s relevant. More importantly, we took a concrete example of a model that you can implement today in order to get the most out of your marketing efforts and create effective customer lifecycle management. 

Remember that businesses operate differently, so your best bet would be to use the professional services of experts in the field, with the proper management tools, so you save money and time in the long run.

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