Today’s marketplace is more competitive than ever. To really succeed in such a competitive market, your company needs loyal and lifelong customers. The most successful businesses are the ones with loyal customers. Loyal customers come to your company consistently, and they are a great way to bring in new potential customers. Even though customer loyalty may seem like a simple idea—after all, great customer experiences should be the norm—it’s not always so easy to achieve.
But how do you keep your customers coming back again and again? The customer lifecycle could be the answer. Whether you manage a small company or lead a large corporation, it’s crucial to understand your customers at every stage of their relationship with your business. That’s how you can work on improving customer loyalty. Understanding where customers are in their lifecycle with your company is key to ensuring that they have an excellent experience from start to finish—and will come back again.
We’ll walk you through the customer lifecycle, how the lifecycle helps businesses improve their customer service and loyalty, and how to get started.
What Is the Customer Lifecycle?
If you want to build a successful business, you need to understand your customers and the lifecycle they’re in at any given time. But what is the customer lifecycle? The customer lifecycle is a term to describe the process of someone becoming aware of your business to making a purchase to becoming a loyal and lifelong customer.
The lifecycle begins when potential customers notice your product or service and become aware that it exists and that your company exists. Next, customers interact with your brand and make a purchase, whether that’s signing up for a newsletter or booking a flight. After that, they use the product or service they purchased. Finally, they move on to enjoying other products and services—or they end their relationship with your brand altogether. Customers can also circle through the cycle and repeat the process multiple times.
At its simplest, the customer lifecycle is the customer’s journey from Point A to Point B—awareness to loyalty.
Stages of the Customer Lifecycle
The five-step customer lifecycle is an easy way to visualise the common stages people go through when making a purchase and becoming repeat customers. It’s a model to understand what can be a complex process. This helpful marketing concept breaks down every stage of the customer journey, from the initial awareness phase all the way through to the point when customers make repeat purchases. The customer lifecycle helps businesses improve their customer service and loyalty by providing valuable insight into which customers need extra attention and what products or areas of service require more focus. Let’s walk through the customer lifecycle stages.
Step 1: Reach
At the very beginning of the customer lifecycle, your goal is to get noticed by potential customers. Potential customers in this stage have some kind of problem or need, and they’re looking for a solution to solve their problem. At this stage, you have the opportunity to reach customers and establish your company as a solution while they’re still deliberating a solution to their problem.
Your first step, therefore, is to reach or establish brand awareness. This means that you need to find a way to let your target customers know you exist. The most important thing is to develop a strong marketing plan. You need to know who your target audience is, where they are, and what they are most likely to see and hear. Social media, SEO, paid advertising, content marketing, and other outbound marketing efforts can be powerful tools to raise awareness of your company for customers looking for solutions.
The customers who learn about your company will then keep exploring and looking for more information. That leads us to the next step in the lifecycle process.
Step 2: Acquisition
Once your potential customers know about you, it’s time to turn them into actual customers who have purchased your product or used your service. As soon as a customer hits your website or contacts you, they’re in the acquisition phase. Your next step is to acquire these customers, so they become part of your customer base.
The exact way to acquire a customer is going to depend on the channel they reach out to you on. For example, if they call you on the phone, the first step to acquisition is to answer all of their questions and concerns over the phone. Only after that can you discuss purchasing your product.
If they’ve found your website, it’s important to have a great marketing funnel that leads your potential customers to a sales or sign-up page. The marketing funnel is designed to help you convert website visitors into leads and leads into paying customers. Your marketing funnel will likely include a number of different marketing channels, such as a blog, social media, email marketing, and paid advertising.
As customers follow your website funnel, they can find more information about your company, product, and services. They may sign up for a service or purchase something, or they may find your contact information on the website and reach out to you to learn more.
Don’t forget to gather some customer information, so you can reach out to them as well. Emails lists, gated content that requires an email address, or live chats can be a way to gather information and keep customers moving forward to learning more.
Step 3: Conversion
Once you’ve acquired customers—that is, people are aware of your brand and have taken some sort of action, such as filling out a lead form or subscribing to your email list—your next step is to convert these leads into paying customers. If you follow up with your leads at the right time, you can turn them into paying customers and avoid empty carts, lost potential customers, and other pitfalls altogether.
In this stage, customers need to know what value you’re providing them. Think of this first purchase as an entrance to a relationship rather than simply a transaction.
Step 4: Retention
Once a customer makes a purchase, it’s not the end. Only working toward conversion is where some companies stop, and it fails to help them develop loyal customers. Working through the entire customer lifecycle helps you stay competitive and have loyal customers.
After you’ve acquired customers and converted them into repeat buyers, your next step is to retain these customers. This means that you need to find ways to keep them happy and coming back for more. Check in with customers regularly to see what they enjoyed and what you can do to improve. Offer them customer-only perks that keep them interested in your services. For example, you can offer them referral points, 24/7 support, bonuses, and other perks to boost retention.
Step 5: Maintain Loyalty
After you’ve acquired customers and converted them into repeat buyers, you’ve now established a relationship. This means that you’ve earned the right to ask for a bit more from these customers. They might write your reviews or post about your company on social media to recommend your products or services to their friends and family.
Your goal here is to maintain this relationship and turn your customers into brand advocates. To do this, you need to stay in touch with your customers and make them feel appreciated. Offer them rewards and incentives that make your customers feel special. Let them know you appreciate them and what they’ve done for your company.
Brand loyalty can’t happen out of nowhere. You need to nurture your customers through the entire lifecycle to reach this point of loyalty and maintaining loyalty. Remember that you’re creating and nurturing a relationship with your customers.
What Is Customer Lifecycle Management?
Customer lifecycle management is tracking the stages of the customer lifecycle and assigning metrics and measuring metric success. It’s a way for you to understand your lifecycle as a big picture and optimise it for the best customer experience. Here are a few metrics to consider for customer lifecycle management:
- Cost per acquisition. This metric measures the amount your business spent on gaining a new customer. It includes everything you did in the awareness stage.
- Ad impressions and conversions. This metric lets you see how many people interacted with your awareness ad and then how many people actually went to your website or downloaded something as a result of interacting with your ad.
- Transaction frequency. This metric helps you know how often your customers are purchasing. How often do your loyal customers purchase? Are there increases or does it level off over time?
Here are a few tips for effective customer lifecycle management:
- Personalise the customer’s experience. After a customer purchases, you can use your management strategy to personalise their experience from there to make sure they feel a desire to stay loyal to your company.
- Invest in automation if necessary. Large companies who have large amounts of potential customers coming through could benefit from being able to automate as many steps as possible to improve their efficiency and accuracy.
- Invite customer reviews. Reviews can go far in helping you attract new potential customers, so inviting your loyal customers to leave you a review can really help boost your potential customers.
The Bottom Line
The customer lifecycle is an easy way to visualise the common stages people go through when making a purchase. Customer lifecycle management helps you actively take control of your lifecycle and move as many customers as you can from awareness to loyalty. Ready to get started? Download different Pearl-Plaza resources to help you learn more about how to take control of your customers’ lifecycles.
