What is the customer lifecycle in marketing?
IONOS editorial team7 mins
The customer lifecycle describes the chronological course of the business relationship between you and your customers. From the first to the last point of contact. When it comes to customer relationship management (CRM), it makes sense to make the individual customer lifecycle stages more tangible so that customer satisfaction and loyalty can be increased in the long term.
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What is a customer lifecycle?
The customer lifecycle (CLC) is a concept that views the customer relationship as a long-term, continuous process. Customers pass through various stages, from the first point of contact to the moment when the business relationship ends. During the customer lifecycle, each contact between the customer and the company is classified as a trigger for further interaction and purchasing processes.
The customer lifecycle plays an important role in CRM (customer relationship management). Taking a detailed look at the individual stages of the cycle helps to optimise customer loyalty and satisfaction in the long run. The insights gained from this can be used for targeted retargeting or for acquiring new customers.
Sometimes it’s possible to win back customers even after the business relationship has ended, and the customer lifecycle therefore starts all over again.
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What are the customer lifecycle stages?
The customer lifecycle is made up of various stages. However, they aren’t uniformly defined, which is why some models show three stages and some show six. Our lifecycle model contains six stages.
Regardless of the model used, it’s worth noting that not every customer necessarily has to go through every stage. These are merely sample templates that can be specifically adapted to the observed behaviour of each individual.
Stage 1: Awareness
The first stage is dealing with potential customers. They’re getting clued up about certain products, comparing suppliers, offers or models and, in case they’re unsure, they will reconsider or postpone the purchase. In this stage, it is important to get the customer’s attention so they are aware of what you’re offering. This can be done through classic marketing measures, for example:
- Search engine optimisation
- Advertisements
- Affiliate programs
- Competitions
Stage 2: Acquisition
A stylish design, high-quality product images and descriptions and, above all, personalised dialogue will help you to gain the customer’s trust. Including trustworthy reviews from other customers or certification bodies also helps to win over potential customers.
If all information about data protection, ordering and delivery processes is available, and the desired payment method is offered, the chances of the customer making a purpose are high. It makes sense to regularly analyse the bounce rate to learn which areas of your website can be improved.
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Stage 3: Conversion
This is probably the most important stage of the customer lifecycle. The user buys a product or uses a service and therefore officially becomes a customer. It is important that the entire conversion process runs as smoothly as possible.
After you have convinced the newly acquired customer that you are a trustworthy partner, you also need to justify this trust. In concrete terms, this means, for example, that you fulfil all promises regarding the condition and delivery of the goods or communicate any complications appropriately. Thank them for choosing your business and offer them the opportunity to give feedback or make a complaint.
Stage 4: Retention
While the previous measures are very typical and frequently applied, the real focus of customer relationship management now follows. In the existing customer stage, you can outshine your competitors through individuality and creativity to ensure a particularly long-lasting customer lifecycle. Demonstrate your appreciation through, for example:
- Bonus systems / premiums
- Competitions / raffles
- Vouchers / gifts
- Special offers / discount campaigns
- Special conditions e.g. quicker delivery time
Make sure to keep in contact with loyal shoppers by regularly asking about their satisfaction and making improvements to your business according to their answers. Don’t forget to respond to your customers’ comments on social networks such as Facebook or Twitter. If you ignore your followers and use the platform solely for marketing purposes, it won’t do much for your reputation. For many companies, social media channels are increasingly becoming the first point of contact for customers due to their easy accessibility.
Aside from social networks, you can inform your new customers about what you have to offer them beyond the purchase they have already made. Use professional email marketing software to present news or interesting products in personalised newsletters.
Stage 5: Loyalty
If your customers are satisfied with your product range and the services offered, this increases the chance of them making more purchases in the future. On the other hand, existing customers become long-term ambassadors for your brand. In the best case, loyalty is reflected not only in regular purchases, but also in the fact that a satisfied customer will recommend your products and services to others. This is known as referral marketing and helps you to strengthen your credibility and to win over potential new customers more quickly.
Stage 6: Re-engagement
If customers have not made a purchase for a while, they are considered lost or former buyers so it makes sense that you would want to 'reactivate' them in the hopes of them making further purchases. Try to persuade them by calling them or sending an email. Create additional incentives by offering special conditions, such as long-term discounts or free delivery.
The role of marketing automation in the customer lifecycle
It is important for a business to include the customer lifecycle in its own marketing and sales processes. However, following the customer journey as closely and satisfactorily as possible presents companies with a huge challenge, especially at the beginning and particularly when many customers are involved.
The solution in this case is to automate the various steps and processes with the help of marketing automation tools. On the one hand, programs like these help to collect and analyse the information. On the other hand, marketing automation aims to make the customer approach and marketing as individual as possible within the customer lifecycle, even as the customer base grows. Using solutions like these does mean increased effort for the company at the beginning, but as soon as the basic guidelines are defined, the high degree of automation will save the business a lot of time and money.
Customer lifecycle and CRM — the perfect symbiotic relationship
The observation and constant optimisation of the customer lifecycle is an elementary pillar of customer relationship management (CRM). This discipline deals intensively with how companies can improve and intensify interaction with customers via the various channels.
It is therefore not surprising that CRM tools also offer suitable features to optimise the customer lifecycle. A professional CRM tool helps to achieve the following goals:
- Optimally adapting the customer lifecycle to customer expectations
- Extensively automating personalised customer communication
- Using touch points in the individual customer lifecycle stages as effectively as possible
Both CRM systems and marketing automation software belong to the MarTech (Marketing Technology) tools category.
The biggest advantage of combining a customer lifecycle and CRM platform is that you can store and record all information and insights centrally. This not only facilitates collaboration between the various departments such as marketing, sales or distribution, but also helps you keep track of your customers.
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Conclusion
If you take a close look at the customer lifecycle of your users, you will gain an optimal overview of how your brand is perceived. By specifically monitoring individual customers (especially in combination with CRM) you can take your marketing measures to the next level. In addition, you gain valuable insights, which enable you to improve customer interaction in the long term and to win over potential customers even faster.
