Customer Lifecycle Management -- What Is It?
BLOG. SMART PRACTICAL BUSINESS ADVICE

Customer Lifecycle Management — What Is It?

“Customer relationship management” and “customer lifecycle management” are two terms you’re bound to come across many times on this blog. These two terms can often be misunderstood as being one and the same. There’s one big difference between them, though: in the latter, time is an important factor.

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 and how often they buy, how often they use post-sales services like support, and how long they’ve been doing business with your company.

The customer lifecycle can be broken down into six simple stages:

The Customer Lifecycle

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.

Bill the customer

The billing stage covers everything from transactional receipts and renewals to successful and failed payment notifications. A lot of customer churn occurs in billing — especially in subscription billing — so an efficient, well-documented billing system is necessary to at least lessen the load on the next stage, supporting the customer.

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.

See all

Featured Posts

Just the Facts: How WORK[etc] Saves Your Business Time and Money

WORK[etc] has always been about bringing real, tangible benefits to its users’ businesses. We don’t want to settle for ambiguous claims (“You’ll save time, but we’re not sure how much; it could be anywhere from a second to an hour!”). Instead, we look for cold, hard facts to back our statements up. We’ve already covered […]

Download the New WORK[etc] Android App Now

Introducing the new WORK[etc] app for Android. Click to play video. Roll out the red carpet — the new WORK[etc] Android app is officially out of beta and is now available on Google Play! The performance improvements and optimizations implemented by our dev team have made the app faster and more reliable, giving users a […]

4 Ways Your Business Bleeds Money and How to Stop Them

When it comes to accounting, few people have the credentials Stacy Kildal, founder of Kildal Services LLC, has. An internationally recognized QuickBooks Online expert, Stacy has been recognized as one of CPA Practice Advisor’s 40 Under 40 and Most Powerful Women in Accounting for the past three years. In 2014, she added a couple of […]

Best of Breed or CRM Ecosystem? The Best Choice to Grow Your Business

Small businesses may not have the resources that large, enterprise-level companies have, but that doesn’t mean they can’t play with similar toys. That’s one of the main reasons why a lot of CRM systems are being made specifically for small businesses. The latest edition of the TrustRadius CRM Software TrustMap, for example, lists over a […]

WORK[etc] Spreads Swag at SXSW 2015

South by Southwest (SXSW) is one of the biggest festivals and conferences the world over. This year, WORK[etc] spread some CRM software love at SXSW alongside The Small Business Web as part of the latter’s “Wheel and Deal Saloon” at the Coyote Ugly bar in Austin Texas. Our very own product specialist, Jason Thayer, was […]

Stamp Your Own Brand on Your WORK[etc] CRM Customer Portal

Collaboration has always been one of WORK[etc]’s main foundations. Not just within your team, but between you and your clients as well. That’s why we made the CRM customer portal, a branded online space where you, your clients, and your contractors can come together to collaborate on projects, clear up any support issues, and go […]