Understanding The 6 Core Stages Of Customer Lifecycle

customer lifecycle

Even though marketing has evolved significantly over time, the customer lifecycle model hasn’t changed that much. The customer lifecycle is essentially the different stages that buyers will go through as they interact with your brand.

It’s often said that successful businesses have the most loyal customers. They are the bedrock of sustainable ecommerce businesses.

But customers that are valuable to your business don’t appear overnight.  There are a number of stages to go through to nurture them.

Engaging your customers is crucial to achieving continued sales. It’s also well known that it’s usually far easier and costs less to get repeat business from existing customers than it is to acquire new ones.

Lifecycle stages help you organize your contacts based on the stage they are at in your sales cycle. It’s important to segment your contacts based on this information, as the interactions with your contacts vary depending on what lifecycle stage they are in.

First of all, for your business to create brand loyalty among your customers, you must understand them and the journey they took to get to your website. Also, you should have certain goals for each stage, map those goals to measure your success, and develop the right content and campaigns to drive success for each of those stages.

What Is The Customer Lifecycle?

The customer lifecycle describes the various stages a consumer goes through before, during and after they complete a transaction. Simply put, it’s the journey a customer takes until they make the final purchase and even after that.

It involves studying the whole customer journey in an integrated way. From first contact to customer relationship management rather than narrowly focusing on a single campaign, channel or metric.

The phases a customer passes through during the course of an ongoing relationship with a brand vary on a case-by-case basis.

Customer lifecycle marketing  (CLM) starts with creating the right goal. The key to success in CLM is behind optimising for Customer Lifetime Value (CLV) and not conversion rate (CR) or revenue per visit (RPV). Conversion rate is important, don’t get me wrong, but hierarchy is vital.

CLV (the total revenue received over the total lifetime of a customer) trumps all other metrics for long term profitability.

The customer lifecycle machine is made up of three different, but equally important, elements: acquisition, activation and retention. All of them nurture and guide the behaviour of your visitors in order to achieve specific goals, with the ultimate aim of increasing revenues by maximising CLV. 

You should use a forward looking approach to the marketing of your customer’s entire journey, across all devices and channels. Furthermore, optimise your messaging to align with the various touch points along that journey.

Why You Should Use The Customer Lifecycle Stages

Using the Lifecycle Stages helps to give you a full understanding of where all of your contacts stand in your marketing and sales processes. 

Customer lifecycle marketing (CLM) implies using what you know about each individual customer. From how they interact with your store or website, to their transactional and demographic data. This way you can develop campaigns that nurture them through their journey.

You need to know:

  • Who are your customers?
  • How long it takes for a stranger to become a customer?
  • Who haven’t you marketed to yet?
  • How quickly is a lead passed to sales?
  • Who needs to be passed to sales?
  • How quickly is the sales team working these leads?
  • Who is the marketing team nurturing?

Customer Lifecycle Stages

1. Prospect

This category contains all first time and repeat visitors who have not yet purchased from your online store or given you any details about them.

You should think of all your visitors as opportunities. This will encourage you to continually test new ideas and take advantage of these opportunities on a daily basis.

2. Lead

Through nurturing, this step is a method to optimise the ‘prospect to customer’ conversion rate.

Leads are prospects who have performed a some sort of converion. Such as signing up to your blog or giving you some personal information in the process.

Obviously, the most important information to gather is the email address. This information can then be used to market to them after they have left your site. Depending on the information you gathered you will be able to market to them in a more relevant way. 

3. Single Purchase Customer 

Individuals who have completed their first transaction on your website.

4. Repeat Customer 

Individuals who have made more than one transaction with you. But, they are yet to become loyal customers.

5. Loyal Customer 

Loyal customers are those that have completed more than 3 purchases, have been a customer for more than, let’s say, 6 months and have performed a transaction in the last ‘y’ months.

You should choose the ‘y’ months to be relevant to your average sales cycle.

6. Advocate

Because it’s a lifecycle, the journey doesn’t end when the retention stage is reached. Instead, advocates help recruit new customers through word of mouth, or word of social. 

You want these loyal customers to become brand advocates for your business. If they are truly satisfied, they most likely won’t have any issues recommending your products or services to friends and family.

By doing so, advocates help spread awareness amongst social circles. Also, if they continually spread positive recommendations, their network is more likely to convert as well.

If you don’t have a large number of customers that go on to become advocates for your company or brand, you need to go back to each of the lifecycle phases. Ask your customers what you can do to secure their advocacy and their loyalty.

Conclusion

It’s vital to know and understand the customer lifecycle stages and use them in your marketing.

By using data from a number of sources to get a detailed view of the customer and their preferences, you gain insight. You can identify where people are in their customer journey.

Then, you can use these insights to decide which marketing messages will guide each customer through to the next stage of their journey.

And last, but not least, delivering these message at the right time to encourage them to make that transition.

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