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

Multitasking is Killing Your Productivity. Here’s How to Save It

Just like every other small business owner, I juggle a lot of tasks as the owner and founder of WORKetc. One minute I’m overseeing development on our web app, and the next I’m on a sales call with a potential customer. Sales, support, projects, finance—I’m basically both leader and member of these very different departments […]

4 More Tried and Tested WORKetc Tips from Real Users

Efficiency and productivity aren’t just buzzwords when it comes to running a small business. They could make the difference between you leading the pack and being dead last. This is particularly critical in an economic climate where profit margins are tighter than spandex. The only way to stay afloat is to make sure your entire […]

Top New Apps to Automate, Manage, & Grow Your Small Business in 2018

Ever tried unscrewing a screw using a coin? It can be done, but it takes much more time and effort than if you just use a screwdriver. It’s the same with apps. There’s a glut of them out there, and finding the right ones to automate, manage, and grow your small business can make the […]

Real Users Reveal How They Save Time with WORKetc’s Mobile Apps

Up until around eight or nine years ago, I always kept a small notebook with me wherever I went. I was already knee-deep into my entrepreneurial ventures back then, and that notebook was pretty much my database for everything related to my businesses. Contacts, sales leads, project info, ideas both practical and slightly mad—I kept […]

Top 4 WORKetc App Integrations, As Picked by Real Users

There’s not a lot WORKetc can’t do when it comes to managing a small business, what with its built-in CRM, project management, billing, timesheets, and customer support modules. It’s an entire business management ecosystem unto itself without even plugging in any additional third-party apps. We do recognize, however, that some businesses have their own app […]

How to Win That Elusive “Yes” for Your Sales Quotes and Proposals

If first contact with a sales lead is like a first date, then sending out a sales quote would be the equivalent of getting down on one knee and proposing. Now, putting your best foot forward on that first date is just the start. If you want to get a “yes”, you better be ready […]