Simply put, the customer lifecycle is a running record of important milestones in your relationship with your customers. By keeping track of the customer lifecycle, you can better align your processes according to customer experience. This can be done by keeping a close eye on customer behavior — purchase history, how much they buy, how often, how often they avail of post-sales services like support, and how long they’ve been patronizing your company.
The customer lifecycle can be broken down into five simple stages:
Find the customer
This stage is where you use all the leads and other usable data in your CRM to find the greatest number of new customers as you can. Whether it’s through webforms, email and web marketing campaigns, ads, word-of-mouth — it all starts here.
Sell to the customer
Think of the first sale as the first date. You put your best foot forward so your customer gets a good first impression of your brand. You sell so you can deliver.
Deliver to the customer
OK, so your customer is sold on one of your items. Now you better make sure you deliver on all your earlier promises and sales pitches. This stage, along with the first, is possibly the most important stage as it can affect every interaction you have with your customer in the future.
Support the customer
Let’s say that the first sale went fine. With the “first date” over, you now turn your attention to future dates. At this stage, you focus on keeping your customers from leaving. You up-sell, cross-sell, and identify potential problem areas before they become too big to handle. You try to woo back any lapsed customers.
That can be a big factor financially, especially to small businesses and startups. Online marketing startup Flowtown crunched the numbers a couple of years ago and found that it costs six to seven times more to get a new customer compared to retaining existing ones. Others place the cost increase higher, at ten times or so.
Relatively smaller retention costs can lead to big gains, too. The Harvard Business Review notes Fred Reichheld’s view on retention in his book, The Loyalty Effect. In it, Reichheld estimates that a mere 5% improvement in retention rates could yield anywhere between a 25 to 100% increase in profit. That’s a big gain any way you cut it.
Gain the customer’s loyalty
This is the ultimate end-goal but only in the sense that it’s the final stop before it all loops back to selling.
Reaching this point doesn’t mean you just grow complacent, either. Once you acquire customer loyalty, you have to ensure that it doesn’t waver. Aloyal customer base not only reduces churn, it can become a steady source of powerful brand advocates and word-of-mouth advertisers.
Now, because the customer lifecycle touches almost every part of your business, successful customer lifecycle management requires absolute synergy between all of your company’s different departments. Everyone from marketing and sales to finance and support must be in sync, as a complete picture of the customer lifecycle can’t be seen if one part is missing.