customer life cycle research

Everything You Need to Know about Customer Lifecycle Management

Published: January 24, 2022

Every good customer service professional knows that business is about more than closing a one-time deal. The best companies build mutually beneficial relationships with customers that equate to a higher customer lifetime value — in other words, they ensure that their customers are going to stick around for a while.

They do this because they pay attention to the customer lifecycle. Analyzing the customer lifecycle allows you to better prepare your marketing, sales, and customer service teams to turn one-time purchasers into loyal promoters.

We'll walk you through the definition of a customer lifecycle, the process of conducting a customer lifecycle analysis, the best tools for managing it, and the top lifecycle marketing strategies that can increase your customer retention rates.

Let's get started.

What is the Customer Lifecycle?

The customer lifecycle refers to the process of prospects becoming aware of a product, making a purchase from a brand, and ideally becoming a company's longtime customer. The process is made up of five stages: reach, acquisition, conversion, retention, and loyalty.

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More simply, it outlines the steps taken by a customer as they progress through the flywheel and sales funnel. It gives marketing, sales, and customer service teams a complete picture of the customer's journey and highlights areas for improvement.

Your team can leverage the lifecycle to create lead acquisition content and deliver customer experiences that delight customers at every stage.

Before we go over the customer lifecycle stages, grab your free customer journey map templates so that you can map your customer's journey as we go along.

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With your templates in hand, let's dive into customer lifecycle management.

What is Customer Lifecycle Management?

Customer lifecycle management is the process of tracking the stages of the customer lifecycle, assigning metrics to each one, and measuring success based on those metrics. The goal is to track the business' performance over time as it relates to the customer lifecycle.

Every company has the opportunity to control and guide the customer journey.

Most customers follow a similar set of steps when it comes to choosing a brand's product or service and, eventually, becoming loyal to that brand. Rather than leaving that to chance and hoping that customers will choose you, you can guide them in your direction.

You're not manipulating prospects. Rather, you're intentionally giving them the kind of content they're looking for and thus providing value. In doing so, you prove that you're a reputable, transparent brand that has its visitors' and customers' best intentions at heart.

The customer lifecycle is handy to see how your customers behave, so let’s jump into detail on what that looks like at each stage of the process below.

Customer Lifecycle Stages

As mentioned, the customer lifecycle has five stages: reach, acquisition, conversion, retention, and loyalty. While it's similar to the buyer's journey , the customer lifecycle takes into account the customer’s experience, or what happens long after a prospect makes a purchase.

We'll walk through these stages one by one.

In this stage, a customer searches for a product after becoming aware of an issue or problem they need to solve. This stage is called “reach” because it's your chance to reach the customer while they're deliberating.

In this stage, your customer is comparing products across competing brands (including yours), carrying out research, and reading customer reviews. Social media marketing , SEO, search engine marketing , and other inbound and outbound methods should place your brand on this customer's radar.

This stage is successful when the customer reaches out to you for more information, looking to either educate themselves further or get a definitive price.

2. Acquisition

When the customer gets to your website or calls you on the phone, they've officially entered the acquisition stage.

This stage will look different depending on the acquisition channel the customer has used. If they called over the phone, for example, you'll need to respond to the customer's questions and concerns, as well as to inquire for more information on the customer's needs . Following that, you'll offer the best products or services to satisfy their needs, as well as educate them on the uses of those products or services.

If they've found you via your website, they should come across helpful, educational content that can help them make a purchasing decision. Every content offer, pricing page, or blog post should give the customer what they need to decide on making the purchase.

Some of this content should be gated so that you can get the customer's information. Don't forget: your service team should be available via live chat to answer urgent inquiries. In many ways, all interactions are customer service experiences — even something as simple as someone accessing and using your site is a customer service touchpoint.

3. Conversion

Having gained all the necessary information and being delighted with your brand's customer experience, the prospect makes a purchase. They've officially converted and turned into your customer.

In this stage, you want to make it clear that you're providing value. They've entered a relationship with you, not just made a purchase.

But the work doesn't end here. It's time to retain the customer so that they continuously come back to your brand.

4. Retention

Customer retention starts by finding out how the customer feels. Check in with them to ask how they've enjoyed their new product or service. Carry out customer service surveys , measure your Customer Satisfaction Score , and establish a Voice of the Customer program to find out what you can do better.

Using information directly from them, you can continuously make improvements to your products and services, as well as the customer service experience.

In this retention stage, you'll want to offer exclusive perks that only your customers have access to. 24/7 support, product discounts, and referral bonuses are all perks that can take your customer from a plain purchaser to a brand promoter.

In this stage, the customer becomes an important asset to the brand by making additional purchases. They might post on social media about their experience with your company and write product reviews that inform a future customer during the reach stage.

Brand loyalty is of the utmost importance. Here's a common example.

In the automobile industry, there are dozens of brands selling similar vehicles for similar purposes. So, what helps a customer choose an SUV between, say, Toyota and Chevrolet?

The answer is brand loyalty. For instance, the customer's first car could have been a Toyota Camry back in the 90s. The car was reliable throughout and beyond their college years. Now, as an experienced car-buyer looking to invest in a new SUV, which company are they going to go with? The brand that has been there for them for the past three decades, or the one that's completely new to them? Probably the former, unless a bad customer service experience drives them away.

Your customer reaches this stage after being influenced by the previous four stages. In other words, you can't create brand loyalty out of nowhere. It must be nurtured and instilled in the customer through service experiences that solve for them and proves the value of your product (and of your brand).

Although these are the typical stages that a customer follows in their journey with a brand, this process can be fluid. Customers can come to learn about a brand in several ways: family or friend recommendations, social media, advertisements, research, and more.

Overall, it's essential to be aware of the customer lifecycle so you can manage it effectively, and mapping it out can aid in the process.

Customer Lifecycle Map

A customer lifecycle map is a high-level, visual tool that marketers use to track where customers are in their buyer journey. It’s important for understanding the behavior of customers as they go through different stages.

Differentiating — or mapping out — what actions in the lifecycle correlate to each stage can help you build a buyer journey that takes prospects from being familiar with your business, to raving advocates.

Now that we understand the customer lifecycle and the use in mapping it out, let’s talk about analysis.

Managing the customer lifecycle won’t be possible unless you carry out a customer lifecycle analysis, which will show you how your customers are currently moving through the pipeline.

Conducting a Customer Lifecycle Analysis

Knowing how you're faring at every stage of the customer lifecycle is essential to leveraging it for your brand's benefit.

Below, you'll find a list of questions for each stage that can help you analyze your current customers' journey. These questions should help you identify problems in the customer lifecycle — and come up with solutions that can lead to a better experience overall.

Analyzing the Reach Stage

When analyzing the reach phase of your customer lifecycle, you'll seek to figure out whether prospects can find your company.

You'll want to answer these questions:

• Where does a prospect first hear about your company? TV channels, social media platforms, sponsored ads, or search engines?
• How are you performing on these channels? Click-through rate and impressions can be indicators of reach.
• What are your competitors doing to reach customers that you're not doing?
• Are you known for a good or bad service experience?
• Do you post regularly on social media?

Analyzing the Acquisition Stage

The acquisition phase is all about the information and tools you offer. This information then allows prospects to become leads and get close to making a purchasing decision.

• What kind of content is on your website right now that can help make a customer make a decision?
• Do you have a blog? Is it easy to navigate and read?
• Have you created content offers that can entice a prospect to convert?
• Is your pricing available on your website? Do customers have the opportunity to call your sales team, should they choose or need to?
• Is your site easy to navigate, and is your service team easy to reach?

Analyzing the Conversion Stage

In your analysis of the conversion phase, your goal is to understand where there might be barriers to making a purchase.

• Is the purchasing process easy and straightforward? Do you offer an option for guest checkout, if applicable?
• Are there blockers to making a purchase? A buggy site, an outdated checkout page, or an insecure domain?
• Have you created a privacy policy that protects your customers from abuse and theft?
• Do you have a clear refund policy, product guarantee, or try-it-before-you-buy-it program that makes it easier to do business with you?
• Can your customers tell the quality of your product based on your product descriptions?

Analyzing the Retention Stage

When analyzing the retention phase, you'll want to surface where you can make your customer's experience better, so that they stay with you for longer.

• How do your customers feel about your business?
• Have you made it easy for customers to do business with you again? For example, do you include a one-click reorder button in your user portal?
• Do your customers have a dedicated customer success manager that can help them navigate their new product, if applicable?
• How do customers like their new product after they purchase from you?
• Have you personalized the customer's experience so that they feel seen and appreciated by your brand? For example, do you deliver product recommendations based on their previous activity?

Analyzing the Loyalty Stage

Inspiring customer loyalty is difficult. To improve this phase of the lifecycle, you'll want to analyze how likely it is that the customer will return for another purchase (and bring others along, too).

• Have you included social media follow buttons on your website and marketing emails?
• Do you engage with current customers in your social media profiles and comments?
• Do your current customers experience unique perks such as exclusive offers, discounts, and birthday gifts that can keep them coming back?
• Is there a referral program in place that makes it easy for your customers to bring you more prospects?
• Have you made your company easily accessible to your customers via email, phone, and live chat?

Now that you know how to analyze each stage of the customer lifecycle process, let’s talk through how you can manage your own.

How to Manage the Customer Lifecycle

1. identify your target audience., customer lifecycle stage: reach.

Before your customers discover your company, you need to determine who you're trying to reach. Rather than marketing to everyone, identifying a specific target audience, which will help you create content that's relevant to your customers.

The easiest way to define your target audience is to create buyer personas . Buyer personas are fictional people that represent the demographic and behavioral characteristics of your customer base. They have names, backstories, and even hobbies. Everything you need to know about your customers is found in these personas. Remember, however, that they're fictional, and that the needs of your customers may evolve.

2. Share relevant content.

Give your customers a reason to trust you before they invest in you. By putting out lots of useful, engaging, search-engine-optimized content, your company will pop up more frequently when customers are searching for related topics.

Content can include original blog posts offering industry information; templates for email, infographics, and other marketing tools; and online courses, such as those offered by HubSpot Academy .

Later, when customers are looking for certain products or services, your company will be the first that comes to mind. This is the basis of the inbound marketing methodology.

3. Provide self-service resources.

Customer lifecycle stage: acquisition.

Once a customer has gotten acquainted with your brand and its content, it's time to take it a step further by providing self-service resources that go over every detail of your product. You'll make potential customers' lives easier by offering as much information as possible. It limits their need to reach out to your customer service team and will facilitate a well-informed purchasing decision.

For example, you can create a knowledge base — a centralized, online database offered by your company containing extensive information on the uses of your products and services and answers to FAQs. Customers like to handle as much of the purchasing process on their own, so providing them with a means to educate themselves will further attract them to your brand.

4. Use proactive customer service.

Even if people haven't bought your product, they may still have questions about it or your company. They may not know how it works, or even what it does, and this can lead to potential customers walking away from a purchase.

Rather than relying solely on self-service tools, your sales team should be working proactively as well. They should be reaching out to leads and offering them trials or demos that help familiarize customers with your products. This not only promotes your product line but also establishes a personal relationship with the customer.

5. Remove friction from the purchase stage.

Customer lifecycle stage: conversion.

Build a simple, online ordering system. That way, the most difficult part of the purchasing process is the customer writing out their credit card number. While it may seem obvious; the easier it is to add items to a cart, add shipping and card information, and press "submit," the more likely it is that a customer will make a purchase.

6. Provide support options during the purchasing decision.

Depending on what you're selling, the purchase stage can be a high-stress moment for the customer. No one wants to have buyer's remorse , and this fear of regret can act as a major point of friction during the customer experience.

One way to counteract this is to provide support options during the purchase stage. For example, you can add a live chat widget to your website that links to a support rep. That way, customers can easily contact your team when they have questions while they're shopping. Instead of navigating away from the page they're on, they can just click on the chat widget, ask a question, and return to their purchase.

7. Personalize the customer's experience after a purchase.

Customer lifecycle stage: retention.

Don't forget about your customers after they've made a purchase. If you do, that usually ensures they'll be a one-time customer.

Make the customer feel just as cared for post-purchase as they are pre-purchase. Set up an automated email system that immediately thanks customers for their orders post-purchase. Or you can personally reach out after their product has been shipped to ensure they got exactly what they wanted and are happy with their purchase.

8. Invest in automation.

Personalizing your post-purchase engagement is easy when your team only works with a handful of customers each day. But as your customer base grows, you'll need to scale your efforts accordingly to keep pace with customer demand.

This is where marketing automation comes into play. Pairing it with your contact base and CRM allows you to quickly access user information and turn it into personalized content.

For example, you can set up a workflow that automatically sends customers an email whenever a new product or service is released. This keeps you in steady communication with your customers and helps you maintain an active relationship with them.

9. Invite customer reviews and encourage referrals.

Customer lifecycle stage: loyalty.

A customer will need that final push to encourage them to go above and beyond for your brand. Encourage happy customers to share their experiences by making it simple to do so. Email them brief surveys, link them to your Yelp or Google Reviews sites, and offer them discounts or compensation for referring friends.

Managing the customer lifecycle is critical to guide customers to your brand. You can follow these steps to ensure you're always maximizing the effects of customer lifecycle management.

At every stage, you should follow best practices to ensure you’re getting the most of your efforts.

Customer Lifecycle Management Best Practices

1. personalize interactions with prospects and customers..

A key part of managing the customer lifecycle is ensuring that every interaction—including calls, emails, and chats — are personalized to each lifecycle stage. For instance, you wouldn’t send an early-lifecycle customer a discount offer to purchase your product when they may still be doing research and considering a competitor. Instead, you’d send helpful resources that will inform your prospect about the problem they’re having and about how they can go about solving it.

You can personalize interactions by using a CRM like HubSpot that can help you look at your customer’s browsing history on your website. If they look at a certain blog post, then you know the type of research they’re doing and whether they’re close to making a purchase.

2. Create an omnichannel experience to reach customers where they are.

Great lifecycle management begins with being where your customers are. Unless you offer an omnichannel experience to your customers, you won’t be able to manage the lifecycle efficiently and effectively. Acting inconsistently or being only on certain platforms will create gaps in your understanding of the customer lifecycle.

3. Survey current customers to find out points of friction during the lifecycle.

The customers who’ve purchased from you are your best source of truth for analyzing and improving your customer lifecycle. Send out surveys to find out where they found out about you, how they feel about your brand, and where they felt like there were gaps in the acquisition process.

For instance, customers might say you need an up-to-date website, which means you should make it a priority for your next quarter.

4. Survey prospects who never converted to find out what prevented a purchase.

Your next best source of truth? Prospects who never made a purchase. Knowing what keeps your audience from converting is integral to removing roadblocks and points of friction. For instance, they might prefer a competitors’ product because of its ease of use, or maybe they felt that they couldn’t find enough information about your product online to make a purchase decision. Whatever it is, it’ll allow you to address these concerns and feed more customers into your flywheel .

5. Continue nurturing customers post-purchase.

As mentioned, the customer lifecycle continues even after customers make a purchase. In fact, retaining customers is often more important and impactful than acquiring new ones.

Whether you send a new perk every quarter or send a check-in email every month, you want your customers to feel valued and appreciated for giving you their business. After all, they don’t owe their business to you — yet they chose you in a sea of competitors. Keeping up with customers after a purchase is an effective way of continuing to manage the lifecycle and not letting the lifecycle automatically run its course (and potentially end prematurely).

The key to managing the customer lifecycle effectively is listening to your customers at every turn. That’s going to help you refine your strategy at the reach, acquisition, conversion, retention, and loyalty lifecycle stages.

Next, let's go over some of the tools you can use to manage the customer lifecycle and encourage customer engagement .

Customer Lifecycle Software

Using customer lifecycle software can help you automate the customer lifecycle management process. There's no need to remember each customer by name — so long as your software does it for you.

Here's some software you may need:

1. Content Management System

Customer Lifecycle Stage: Reach, Acquisition, Conversion

Most customers find companies online — meaning you'll need a website and, more specifically, a content management system . With a CMS, you'll be able to reach customers via search engines, acquire them with tailored content offers, and convert them with an easy-to-navigate site that facilitates the purchasing process.

It should also give prospects immediate access to your service team. You should have the option to add live chat, lead capture forms, and click-to-call buttons.

Here are some CMS resources to get you started:

• What Is a CMS and Why Should You Care?
• The 13 Best CMS Systems Today & How to Choose

2. Marketing Automation Tool

Customer Lifecycle Stage: Reach, Acquisition, Conversion, Retention

After acquiring or converting a prospect into a customer, it's time to nurture and retain them. You'll need a marketing automation tool that allows you to send emails, gate content, provide personalized experiences, and segment your customer list based on behaviors and attributes.

Here are some marketing automation resources:

• How to Implement & Succeed With Marketing Automation
• The 14 Best Marketing Automation Software Tools Available to You

3. Customer Relationship Management (CRM) System

Customer Lifecycle Stage: Acquisition, Conversion, Retention, Loyalty

A CRM keeps track of prospect information and activity in a unified database. In their contact card, you'll have access to their name, email, and phone number, as well as their activity on your website.

You'll use a CRM after the customer submits a form or signs up on your website. In other words, you'll use it after the reach stage. It should allow you to collect leads, assign contacts to team members, and create automation workflows.

HubSpot allows you to keep all of your prospects' information in one simple-to-use platform, keep all conversations in one inbox, and automate follow-up emails. You can start with our all-in-one CRM for free, then scale up as your business grows.

Here are some CRM resources:

• How to Use a CRM: The Ultimate Guide
• The 11 Best CRM Tools for SMBs & Enterprises Alike
• 12 Key Benefits CRM Systems Provide to a Business

4. Customer Service (Help Desk) Software

Customer Lifecycle Stage: Conversion, Retention, Loyalty

Last but certainly not least, you'll want a customer service tool. While it only applies to the last three stages of the customer lifecycle, a help desk software is arguably the most important tool for customer lifecycle management. Customer service experiences can deter a customer from returning to you — worse, they might tell others to avoid doing business with you.

A customer service software tool should allow you to create tickets, communicate with customers across platforms, carry out customer experience surveys, and create a knowledge base.

Here are some customer service tool resources for customer lifecycle management:

• What Is Customer Experience? (And Why It's So Important)
• Help Desk: What It Is & The Software That Supports It
• The 16 Best Customer Service Software Tools in 2021

Grow Your Business with Customer Lifecycle Management

Every customer progresses through the five stages of the customer lifecycle. While it seems like that process is a result of chance, you can take control of your customers' lifecycles by analyzing your current performance, initiating lifecycle marketing campaigns, and using the right tools to manage each stage. Use customer lifecycle management to create a loyal customer base and grow your business exponentially.

Editor's note: This post was originally published in January 2020 and has been updated for comprehensiveness.

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Understanding the customer lifecycle.

13 min read Understanding the customer lifecycle can help you plan and execute successful marketing and CX. Here’s what you need to know.

What is the customer lifecycle?

The customer lifecycle is a way to describe how customer relationships evolve over time, viewed from a business-first perspective. It covers every stage from new customers arriving to longer-standing repeat clients developing enduring brand loyalty.

Framing these interactions as a cycle shows the ongoing nature of customer acquisition and retention, something a business must continue to do every day. Customers move from stage to stage, and may drop out at different points and start the cycle again.

Typically, businesses use the customer lifecycle strategy to help plan and structure their marketing to help move customers from stage to stage. It can be extended into CX (customer experience) too, helping businesses provide a great experience at every stage.

Customer lifecycle vs. customer journeys vs. conversion funnel

It’s easy to be confused by the number of similar-sounding phrases that describe customer-business relationships. Many people use terms like lifecycle, journey, funnel and life stage interchangeably, but in fact each idea has its own specific meaning.

A customer journey tends to be specific, and is always controlled by a customer’s choices. In contrast, a customer lifecycle is a generalised view of customer behaviours, created by a business based on their overall observations of all customers. A customer lifecycle doesn’t happen spontaneously – it’s driven by business actions.

As an idea, the customer lifecycle has more in common with a conversion funnel than a customer journey. Unlike the conversion funnel though, the ecommerce customer lifecycle is a cyclical process, not an end-to-end one. Rather than focusing on the stages of winning and converting a customer, it spans the whole customer relationship, including multiple transactions and interactions between buyer and business.

Customer lifetime value – and its measurement

One of the uses of the customer lifecycle strategy is that it can help you forecast and measure customer lifetime value (CLV) . CLV is the total monetary value a customer brings to your business across all of their transactions.

You can calculate CLV at a basic level using a simple formula:

Customer revenue per year × Duration of the relationship in years − Total costs of acquiring and serving the customer

Because acquisition, which is typically expensive, is a one-off cost, and the revenue increases year-on-year, it’s clear that the longer the relationship lasts, the more valuable the customer becomes to your business.

See how you can become a CX leader with Qualtrics

Customer lifecycle stages

1. awareness.

This is when the customer first becomes conscious of your business. This could be through an internet search, seeing your advertising, reading a review or coverage on a blog or in a magazine, or through word of mouth.

In a world where attention spans are short and markets are highly saturated, capturing a customer’s awareness can be a significant challenge for businesses. You need to be in the right place at the right time with the right message to win their notice.

Awareness marketing strategy:

Developing a strategy for building awareness should be a significant part of your marketing plan. At this stage, you have a more-or-less blank slate, and the opportunity to try out a few things and see what works.

Begin by gathering data about your customers so you can build marketing campaigns around their priorities and interests. It’s useful to know basic demographic information such as age, gender and income, where your target audience shops, which websites and platforms they frequent online, and which brands they are interested in.

Find out where awareness is currently coming from, and aim to maximise that. You can do this by adding some quick feedback listening posts to areas like your ecommerce checkout, newsletter signup form or account registration, asking people how they heard about you. A single multiple-choice question can provide valuable data.

If you’re starting out as a business, or you’re just beginning to think more strategically about your customer lifecycle, you may want to adopt a trial-and-error approach, setting budget aside to try out different advertising and marketing techniques such as social media advertising, PPC, friend-get-friend promotions and online ad networks.

2. Consideration

At the consideration stage, being aware of your business and what it offers develops into a more critical analysis for the customer. They are starting to weigh up your value and compare you to your competitors. They’ll also be thinking about how well your products and services match up to their needs and where they would fit into their lives.

They might revisit some of the information sources they used during the awareness stage, re-appraising them in a more detailed way, and bring in new ones too. Reviews and ratings, anecdotal stories and testimonials from existing customers, product pages and specifications can all play a part.

Consideration marketing strategy:

Your customer is on a mission to collect and process information. They’re asking questions, so you can help by supplying answers. You can support them by providing content that makes it as easy as possible to analyse the options and understand features and benefits. If you have an ecommerce site, you could provide product comparison tools for customers to compare things on a like for like basis.

You can also offer encouragement and reassurance by providing case studies and testimonial content that allow them to put themselves in the shoes of an existing customer with similar questions and criteria.

Personalised contact can be powerful at this stage. If your prospective customer has opened an account or signed up for emails, be sure to address them by name and reflect your knowledge of their interests through customised content in the form of promotions, discounts, product edits or value-added content like how-to articles and guides.

Now is also a good time to answer questions directly through chat or AI chatbots, which should be visually obvious on your website or social media pages.

3. Purchase

Here’s where your customer becomes a customer in the truest sense – exchanging money for goods and services. However, although they’ve reached the point of making a purchase, things can still go wrong and sales can fall through at the 11th hour.

Purchase marketing strategy:

To make sure purchases are successfully completed, you need to know what might prevent that from happening. Use data from past customers to look at where drop-offs occur in the purchase process and gather feedback to find out why customers failed to complete their purchase.

Emailing customers who have abandoned a cart can help you get a second chance at purchase completion – “you’ve left something in your basket” messages can recover 10% of your potential sales, according to Tidio . These messages can be automatically sent to logged-in customers who have shared their email address and opted in to the necessary marketing consents for your region.

Providing contextual support through on-page chat software can also help your customers move past barriers to purchase, such as technical problems or questions about delivery or returns. These channels can also help you collect feedback from customers who have decided not to proceed for more subjective reasons like price or quality concerns, to help you understand their reasons why and feed those back to the relevant areas of your business.

4. Retention

After the first purchase has been made, the focus moves to the ongoing relationship. Will the customer buy from you again? You can help increase the chances by doing your best to promote an ongoing connection.

Content that’s of interest to the customer, promotions relevant to their interest, loyalty programmes and customer feedback can all come into play at this stage.

Retention marketing strategy:

Maximising retention is all about providing great service and personalised support for your new customer.

Let them know you’re ready and willing to answer questions and offer tips and advice about the product or service they’ve bought, and provide self-help resources too such as FAQs and troubleshooter guides on your website.

Ask for their feedback about their new purchase , and use this as an opportunity to reach out and close the loop if they have expressed doubts or talked about problems with any part of the customer journey so far.

As the relationship progresses, you’ll be getting to know your customer’s tastes and preferences, meaning you’ll be able to offer them personalised recommendations and discounts on the things they’re most likely to be interested in.

5. Advocacy

At this stage a repeat customer has developed a strong positive bond with your brand and is spontaneously promoting it to other people.

It takes time and effort to reach this level, and customer advocates will represent a relatively small fraction of your customer base. Take care to treat them well and recognise their contribution in order for them to remain at this stage.

Advocacy marketing strategy:

Customers at the advocacy stage are precious. Offer them recognition through tiered loyalty programmes that reward their spending through status as well as material benefits. Loyalty programmes can act as a form of gamification that keep customers engaged and make them excited to reach the next level and get more rewards.

You can also reward their willingness to recommend you by setting up a referral programme. This is a formalised approach to advocacy that not only rewards your customer – both they and their referee get a discount or bonus – but allows you to track and quantify the added value each customer brings by referring new awareness-stage customers.

Finally, a powerful way to recognise and retain loyal customers is by closing the loop when they feed back to you about an experience that didn’t go well. By giving personal responses and resolutions to valuable customers, you can repair and even strengthen their relationship with you.

Customer lifecycle management

As well as optimising each stage of the customer lifecycle, it’s valuable to be able to take a step back and look at the cycle as a whole. That way you can understand what proportion of your customers are at each stage and whether there are trends in how people move between customer lifecycle stages – for example they may reach purchase but not make it through to retention.

With an overall perspective, you can also think about assigning metrics to each stage of the lifecycle in order to measure its progress. These might include:

Cost per acquisition

The cost to your business of gaining a new customer through the activities you did at the Awareness stage, including advertising and marketing.

Ad impressions and conversions

You can track your digital marketing and advertising in terms of how many people looked at an ad and how many have interacted with it and clicked through to your website or downloaded your app as a result.

Transaction value

How much are customers spending per purchase? Does this go up or down after the purchase stage as you go into the retention stage?

Transaction frequency

How often do your customers at the retention and loyalty stages purchase? Does the frequency stay constant or does it increase or level off over time? Are there any obvious patterns year on year?

Engagement metrics

Customers who have reached the advocacy stage, and some of those at the retention stage, may be more likely to engage with your brand . How often do they open your emails? Do they follow you on social media, and if so, how often to they “like” or comment?

Learn how Qualtrics can help you measure and improve the customer experience

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The Essential Guide to The Customer Journey and Lifecycle

Customer lifecycles—like the lives of their customers—are messy.

Life in the modern world is messy. As consumers, we’re constantly bombarded with messaging from companies and brands, and our path to purchasing and using products and services is more complicated than ever. So, it should come as no surprise that in this day and age, there’s really no such thing as a neat and tidy sales funnel. Customer lifecycles—like the lives of their customers—are messy.

Still, while it would be impossible to present a single customer lifecycle model that applies to every single business out there, experts have settled on a handful of basic phases that are common to the majority of companies, as explained in  this American Express OPEN Forum article : reach, acquisition, conversion, retention, and loyalty.

Phase 1: Reach

This phase (also commonly called “discovery” or “awareness”) is where the clock starts and the customer lifecycle officially begins. Well, sort of officially. After all, it’s tough to know exactly when a customer experiences his or her first contact with your business or your brand. In fact, it might be tough for the customer himself or herself to recognize that touch point.

Tracking Reach

Still, from a marketing perspective, it’s important to track those touch points as accurately as possible. That way, you can figure out which marketing and advertising efforts—both print and digital—are most effective in driving brand awareness and reach. By reviewing those metrics, you can get a good idea of the types of campaigns that give you the most bang for your buck—and thus, are worth your continued investment.

Here are a few ideas for measuring reach, adapted from  this article :

• Identify the most common search terms that are bringing people to your website for the first time.
• Monitor visitor data (i.e., new website visitors and returning website visitors).
• Keep a pulse on social analytics (especially new followers or other first-time user interactions) and online reviews.
• Poll trade show and event attendees (i.e., ask them if they had heard of you before).
• Analyze pay-per-click (PPC) and AdWords data.
• Survey both current customers and prospects on how they heard about you.

Phase 2: Acquisition

Once you’re on a prospect’s radar, it’s time to actually initiate contact. Your mission: to turn your marketing contacts into leads—which, as  this TechTarget page  explains, are potential sales contacts. More specifically, a lead is “an individual or organization that expresses an interest in your goods or services.”

So, how do you turn someone who is simply aware of your brand or product into a potential buyer? In the most basic sense, it’s about interaction and engagement. This can happen via phone call, email, or other targeted online messaging. But remember, it’s not just about making contact; rather, it’s about making the right kind of contact at the right frequency. Gone are the days of indiscriminate email blasting. Modern consumers have to fight their way through a constant barrage of marketing communication, and if your brand’s approach is too aggressive—or if you overwhelm your contacts with messaging—you run the risk that they’ll turn and run in the opposite direction.

On the other hand, if you neglect your potential customers during this stage—or if you provide them with messaging or other resources that don’t hold their attention—then you also could end up pushing them away. In other words, it’s a balancing act.

To overcome these challenges, it’s important to know your audience. Tailor your messaging to  specific buyer personas . Ask yourself:

• What interests them?
• What motivates them?
• What are their goals?
• What are their pain points?
• Where do they go for information?

Use these questions—and their answers—as the basis of your communications. After all, if you can deliver your audience something of value—before they even become your actual customers—then they’ll be more likely to continue engaging with your business.

Furthermore, by taking a more personalized, targeted approach to messaging, you’ll avoid wasting time and energy attracting customers who aren’t a good fit for your company or your product. Sure, it’s exciting to see your lead database grow—and the more potential buyers you have now, the more actual customers you’ll have later, right? Well, sort of. Here’s the catch, as explained in  this Sixteen Ventures article : “If you don’t attract, seek out, and acquire the right customers, not only will you have a harder time (they’ll be less profitable, harder to deal with or please, etc.), they’ll have a harder time.” In other words, while you might have a higher rate of lead generation, you’ll have a lower rate of customer success—and in the long run, that’ll cost you dearly.

Tracking Acquisition

This phase of the customer journey is a little more trackable in terms of concrete data, as it’s relatively easy to define the point at which a contact becomes a lead. It’s also the stage that often gets the most attention from marketers trying to quantify the success of their efforts. “Marketers have traditionally been focused on the front-end of the customer lifecycle, specifically, brand awareness and lead generation,” states  this CIO article . “Their job was to fill the funnel for sales people to convert into revenue.”

As  this KISSmetrics article  explains, there are two types of acquisition metrics you’ll want to consider: those that tell about the “what” and those that tell you about the “who.” More specifically:

• “What” analytics tools allow you to do things like “track traffic, view sources and referrals, set up event and goal tracking,” the article states. Perhaps the most common tool for tracking these data points: Google Analytics.
• “Who” analytics tools, on the other hand, help you answer questions like, “Who is viewing your website? What did they do before and after they signed up? How is your site being used?” the article continues.

Ideally, you’ll incorporate both types of metrics into your acquisition-tracking strategy. But, deciding on the specific data points you want to track is easier said than done. And, as KISSmetrics advises, “You…need to be sure you’re monitoring the right metrics because, rest assured, you can’t monitor them all.”

To figure out which metrics are right for you, start by clearly defining your goals. In this case, as KISSmetrics suggests, the goal is relatively simple: acquiring customers. From there, work backwards to build a funnel. “Maybe the top of the funnel is an email submission. From there, an email is sent about a free trial offer. Finally, the free trial users will convert to paying customers,” the article explains.

Now, come up with three core metrics for each of those three funnel stages. Two examples: the number of people who provide their email addresses and the percentage who convert to paying customers. “For each of your selected metrics, be sure you can demonstrate how that number impacts the goal at that stage of the funnel,” the article continues. That means you should steer clear of so-called “vanity” metrics like social fans and followers, as they don’t have any real value with respect to your defined funnel.

Furthermore, keep in mind that in this day and age, measuring marketing performance doesn’t stop at the point when a contact becomes a lead or a lead becomes a  qualified lead —at least not for those companies looking to rise above the competition in an increasingly crowded marketplace. As  CIO  goes on to point out, “…average performers spend more time and budget on front-end awareness and acquisition activities, such as volume of leads generated and the number of inquiries generated…In contrast, top performers and the companies they work for take a more holistic view of the customer. Their metrics for success are response rates, sales accepted leads and sales qualified leads, not merely lead generation.”

Phase 3: Conversion

This is where the rubber meets the road. In other words, you win the sale and the prospect becomes a customer. The key to success in this phase is focusing on selling the relationship—not just the product. Buyers—especially those interested in B2B SaaS solutions—are looking for companies that will act as their partners, not merely their suppliers.

Tracking Conversion

At the most basic level, conversion happens when a customer actually remits payment to begin using your product or service. On that note, as  Sixteen Ventures  points out, it’s important “that you have a way to collect payment from the customer, in a way that is congruent with their preferred method of payment.”

One of the most important sales conversion metrics is conversion rate, which tells you what percentage of leads actually ended up turning into customers. As illustrated  here , the basic formula for conversion rate is:

Conversion Rate = (Total Number of Sales ÷ Total Number of Leads) X 100

For example, if you made 30 sales last year out of the 100 leads you generated over the same time period, your conversion rate would be 30%.

You can also track your conversion rate with respect to other marketing metrics—website traffic, for example. If you wanted to find out the percentage of your web visitors who ended up purchasing your product, you could do so using the following equation:

Conversion Rate = (Total Number of Sales ÷ Total Number of Unique Visitors) X 100

Obviously, your conversion rate isn’t going to be 100%. You’re going to lose some sales. And at that point, the customer lifecycle for those prospects will come to an end. But that doesn’t mean you should immediately seal their files and lock them away forever. Instead, look at lost sales as learning opportunities. Ask:

• What ultimately caused the prospect to say “no” instead of “yes?”
• Was it a mistake at the sales level?
• Did you do something to alienate the buyer?
• Was your product poorly suited to the prospect?
• Was the prospect misinformed about the product?

These are all questions you should be asking—and answering—each time you miss a shot. Furthermore, you should be tracking and storing this information so you can use it to inform future sales and marketing efforts and strategies.

Phase 4: Retention

Okay, you’ve scored the touchdown (i.e., made the sale). But, that doesn’t necessarily mean you’ve won the game. After all, the customer truly holds the power; chances are, there are a lot of other options out there, and in the modern marketplace, it’s easier than ever for customers to jump ship or walk out your back door, never to return. That’s why, as mentioned in the section above, it’s so crucial that you form a strong partnership with each customer.

In reality, the retention phase includes several smaller phases, some of which are ongoing:

The onboarding process begins immediately after purchase. Your goal is to get your customers up and running as soon as possible. But that doesn’t mean handing them the keys and turning them loose right off the bat. After all, if they attempt to use your product with no guidance or training, they probably won’t be successful, and that will lead to frustration—which in turn, could lead them to regret their purchase down the road.

Instead, you should create a checklist of all the items (i.e., milestones) that your customers must complete in order to use your product successfully from the first time they put the key in the ignition. At minimum, that list should include:

• Migrating the customer from his or her previous system to your system (if applicable)
• Ensuring the customer’s technical setup meets your requirements
• Training the customer to use your product through self-guided learning systems, live and/or virtual training sessions, knowledge base materials, and/or consultative phone calls

While this checklist should help form the basis for your onboarding program, be careful not to let it completely dictate your approach. After all, successful onboarding isn’t just about crossing to-dos off of a list; you should be working toward an overarching goal (i.e., empowering the customer to use your product to its fullest potential).

To measure the effectiveness of your onboarding program—and identify opportunities for improvement—you should be collecting and tracking a few different data points. According to  this article , these may include:

• days to onboard a new client
• days to achieve key milestones
• number of customer interactions during onboarding process

Compare the averages for these metrics over time to determine whether you’re improving, highlight areas where adjustments may be necessary, and measure the effectiveness of any such adjustments.

Finally, don’t stop at merely collecting data. To really get a feel for how you’re doing, you’ve got to get real, live feedback from your audience. “Getting qualitative feedback from your customers can uncover holes in your program and help guide you to make better decisions that data points may not be able to uncover,” the above-cited article continues.

Remember, onboarding is your customers’ first real experience with your product and your company, and the impression you make during the onboarding process will stick with them—and influence their satisfaction level—for the rest of the customer lifecycle.

Once a customer has completed the onboarding process and has begun using your product, it’s absolutely critical that you keep the lines of communication open in case the customer has any problems, questions, or concerns. This is especially true during the first 90 days, because if the customer does not immediately begin to see value in your product, then he or she will be much more likely to ultimately leave you. “This is a critical phase of the customer lifecycle…either you engage them here (what that means is 100% dependent upon the customer in the context of what they’re trying to—or would like to—achieve with your product) or you lose them forever,”  Sixteen Ventures  explains.

This is where churn rate comes into the picture. Simply put, your churn rate tells you how many existing customers you’re losing—and how fast they’re leaving you. Companies that fall victim to the ill effects of churn often are those that put all of their focus and energy into closing new deals, and then disappearing the moment the customer hands over his or her money.

Unfortunately, support—even during the initial 90-day period—often is provided on a reactive, rather than proactive, basis. Instead, companies should shift to an introductory support model organized around known milestones that are clearly laid out for the customer. “Rather than waiting for your customers and users to get lost and feel anxious about what to do next—or how to do it—you should build a proactive approach to Functional Support into your lifecycle messaging (ideally pegged to activity),”  Sixteen Ventures  writes.

And that spirit of proactive support shouldn’t fade when a customer hits the 90-day mark. Instead, companies should monitor their data to look for patterns that might indicate a customer is having trouble—or could potentially have trouble at some point in the future. That way, you can intervene before those issues negatively impact customer experience.

Still, even with a proactive approach to customer support and customer success, it would be impossible to anticipate customer problems and needs 100% of the time. So, you must provide your customers with an easy means of obtaining on-demand support so you can correct problems promptly and get back to delivering value to those customers as quickly as possible. On that front, there are a  few items  you should be tracking to ensure you provide the best support experience possible:

• Total volume by channel. This will help you maintain appropriate staffing levels and determine a strategy for using various channels appropriately in order to optimize customer experience. For example,  Wistia  removed the phone number for its support line from its website because based on research the company conducted, customers obtained a better experience when they submitted support tickets via email rather than via phone.
• Response time. Most customers expect to hear back from a company’s support department within a few hours of submitting a request or ticket, but at the very least, you should be tracking your 24-hour response rate. Taking longer than a day to respond to a ticket will severely impact customer happiness.
• First contact resolution rate. The fewer interactions it takes to resolve a customer’s problem, the more satisfied that customer will be. You should be shooting to resolve a customer’s issue the first time he or she contacts your support department.
• Help delay and abandonment rates. Once a customer makes live contact with you (e.g., via online chat or phone), how long must that customer wait for assistance. If it’s longer than five minutes, you could be in  trouble . And if a large percentage of customers are abandoning those interactions before they’ve received the help they need, you could be in even bigger trouble.
• Moments of delight. It’s important to celebrate your triumphant moments. It’s even more important to dissect those moments in the interest of achieving even more of them. After all, satisfied customers are the building blocks of word-of-mouth referrals and positive reputation. So, each time one of your support representatives reports a “wow” moment, be sure to record the factors leading up to that success. Then, incorporate that information into continued employee training.

One of the reasons support is so crucial during the first 90 days after sale is that this is the period during which the customer should successfully adopt your product. What does that mean? It means the product becomes integral to the customer’s daily activities and operations.

Within 90 days—a full financial quarter—the customer should see clear value in your product. But if the customer doesn’t fully adopt the product, then he or she probably won’t see those results. And in the absence of results (i.e., return on investment), there’s no incentive for the customer to continue using your product (i.e., renew his or her subscription).

Thus, as explained in the section above, you should  monitor adoption  by tracking customer use, activity, and progress toward defined milestones. To get a feel for the specific data points you should be tracking, start by digging into your churn data. Pinpoint those customers who have left you because they didn’t get enough value from your product. Why weren’t they seeing value? Could you have done something to change that?

As for tracking usage for current customers, obviously the easiest place to start is capturing login information (if your customers must log in to use your product). After all, if a customer isn’t logging in very often, they aren’t even getting a chance to experience ROI.

Next, take a look at which product features the customer is using most often. Are they primarily basic features—which tend to deliver less value? Or are they the more in-depth, “sticky” features—the ones whose functions are much more difficult to replace? The answers to these questions should help define your customer success initiatives during the customer adoption phase.

When it comes to tracking usage, there are two main ways to capture this data:

• Feeding in-app usage data for users, companies, and time periods to a database or data warehouse.
• Using tracking codes on your web pages to track page views and actions (i.e., clicking certain links or buttons).

Remember, though, that isolated metrics aren’t super useful when it comes to formulating strategy. Rather, you should focus on usage trends. In other words, don’t just look at the usage data for a single week; also compare that data to that gathered over the last 30 weeks.

The only way to ensure your customers are happy and successful is to continually engage with them. This includes monitoring their satisfaction through:

• Net Promoter Score (NPS) surveys,
• customer health/happiness indices,
• customer advisory boards, and
• customer outreach initiatives.

Getting the most out of your engagement efforts means harnessing the combined power of technology and human interaction. After all, technology might be able to pinpoint areas of opportunity, but it alone cannot ensure your company continues to deliver value.

To do that—and thus, keep your customers—you have to continue nurturing them long after conversion and onboarding. Specifically, you must:

• build and maintain good relationships
• initiate contact at the right times
• anticipate issues before they affect your customers’ feelings toward you, and
• upsell and cross-sell when you see the potential for a particular feature or product to add even more value for a certain customer.

Your  customer engagement management  efforts should build off of those you initiated during the adoption phase. Even after the initial 90-day period, you should continue monitoring usage and behavior patterns and use that data to execute on the bullet points listed above. As  this article  explains, “…consolidating this information and identifying trends is crucial…to measure [customer] progress and take strategic action to help drive future revenue and reduce churn.” Furthermore, “Monitoring social networks using sentiment analysis to mine social networks, gives visibility to the company’s reputation at the macro level.”

Once you’ve collected and analyzed that data, you can use the results to create targeted messaging to users through in-app messages, live chat, emails, or phone calls. “In all cases, the company must prioritize efforts to provide excellent content so the messages are most valuable to the user,” the above-cited article continues.

You should be engaging with your customers across the entire spectrum of the customer lifecycle. However, keep in mind that the elements of engagement will change as the customer progresses through his or her lifecycle. In other words, you won’t—or at least, you shouldn’t—engage with your one-week-old customers the same way you engage with your one-year-old customers.

Many companies view upselling and cross-selling opportunities as a means of extracting as much revenue as possible from each customer. But that mode of operation isn’t sustainable in the long run. Why? Because if you upsell and cross-sell with reckless abandon, you can’t be sure you’re actually providing additional value to the customer. And if you’re not, your customers will catch on—and when they do, boom: all trust is lost. It won’t be long before those customers walk out the back door.

Instead, you should approach expansion with a goal of helping your customers extract as much value out of your product as possible. And as  Sixteen Ventures  explains, “The way that we do that is to create a customer experience that delivers increasing amounts of value over time, creating a natural growth in base-product use, a logical expansion into additional functionality, and where appropriate, adoption of adjacent products from your company.”

Again, as discussed in the previous section, this means using data to launch intelligent expansion efforts—ones that truly will deliver value.

Phase 5: Loyalty

In a perfect world, every single customer you acquire would make it to this stage. At this point, the customer is not only satisfied with your product, but also delighted. He or she is a brand ambassador: someone who sings your praises via online and in-person reviews, recommendations, or testimonials—all of which are extremely powerful when it comes to attracting more customers: “Social Proof is amazingly powerful…when your Ideal Customer prospects see others like them using and succeeding with your product, there’s a level of validation that trumps just about everything else you say or promise,”  Sixteen Ventures explains .

Tracking Loyalty

In addition to keeping an eye on customer reviews and ratings, you can track loyalty using retention measures such as churn rate and renewal. If you’ve done everything right, those renewals should really be non-events; in other words, you should continue getting the same revenue—or, if you’ve implemented a successful expansion strategy, even more revenue—as time goes on.

Additionally, you can get a pulse on customer loyalty by creating a referral program and tracking its use. For example, you could provide program participants with unique sign-up pages where they send their referrals. When done right, these types of programs can produce great results—especially if you offer some type of reward or incentive to one or both parties.

If you don’t yet have the resources to maintain such a program, you could simply include a field in your regular sign-up form where new customers can enter the name of their referral source. Finally, be sure to have your sales team record referral information in your CRM.

Whew—that was quite the epic saga. If this whole customer journey thing has you feeling a bit overwhelmed, don’t worry. In customer lifecycles—as in life—the best approach is to take it one day (and one phase) at a time. Plus, while it might be tough to take a data-driven approach to life—that is, of course, unless you track all of your daily activities as data points—customer lifecycles are ripe for data collection and analysis. So, let the data science be your guide. Implement systems and software to measure and track customer success, and watch your base of engaged, loyal customers grow.

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The Ultimate Guide to Understanding and Managing Your Customer Lifecycle

If you stop to think about it, the term “customer lifecycle” is a little misleading.

For one, the “customer” part implies that the lifecycle starts when someone officially purchases a product from you. But in truth, the customer lifecycle begins before your customer ever hears about your company.

The “life” part of lifecycle implies that there’ll be an end to the customer's time with your business, but that's the opposite of what we're going for when we talk about customer lifecycle management.

By managing each stage of the customer lifecycle well, you’re building a relationship so full of value for the customer that they’ll not only stick around long term, they’ll also be so happy with their experience that they’ll become an advocate for your company.

The customer lifecycle explained

Customer lifecycle refers to the entire process a customer takes with your company, from first hearing about your business, to purchasing a product and using it, all the way through to becoming a brand advocate.

This might sound a bit like the customer journey, but there’s a key difference: perspective.

When a company lays out all of the steps in their customer journey (usually through a visual aid called a customer journey map ), they’re viewing the journey through the customer’s eyes. They’re asking: What does the customer experience at each stage in the journey? What touchpoints do they have with our brand or product?

In contrast, when a company works through the stages of the customer lifecycle, they’re doing so from a business perspective. They’re asking: What do we need to do as a business to successfully acquire and retain this customer’s business?

Think of the customer lifecycle as a story. Each chapter represents a different stage in your customer's experience with your business. It's not just about making a sale — it's about crafting a narrative that fosters long-term relationships that go far beyond any particular transaction.

Customer lifecycle marketing explained

In the customer lifecycle, every interaction matters, from the first hello to the never-ending “How can we help you?” But each stage in the customer lifecycle requires its own unique engagement strategy in order for those interactions to be relevant and impactful.

For instance, you wouldn’t want to send a product feedback survey to a customer who’s still researching their product options — it would likely confuse them and make them feel as though you were rushing them into making a decision.

Customer lifecycle marketing is the art and science of giving customers the information and encouragement they need at each stage. It’s about influencing customers based on where they’re at today and where you want them to progress to over time.

The 5 (or 6) customer lifecycle stages

Most companies will tell you that there are five stages in the customer lifecycle: reach, acquisition, conversion, retention, and advocacy. Here at Help Scout, we also understand how important it is to set up customers for success, so we sometimes add a sixth step — onboarding — in the middle of the lifecycle.

But whether you count five or six total stages in the customer lifecycle, each part plays a pivotal role in driving success for your business, so we’re going to take a deep dive into each one.

We’ll start out by defining each stage so you understand how it contributes to the customer experience and business success. Then we’ll move into exploring some strategies and tactics for analyzing and managing the stage so that you can help the customer through it.

Finally, we’ll discuss the different marketing tactics and channels used for each stage so you can be equipped to engage with your customers throughout the customer lifecycle.

Let’s begin!

The reach stage

The first stage of the customer lifecycle is called the reach stage, but it’s also sometimes referred to as the awareness or the exploration stage.

In this stage, a potential customer either knows they have a need and they're beginning to research solutions or they come across your business organically and begin to consider whether your product could solve a problem or need they didn’t realize they had.

Your goals in this stage are threefold:

Build brand awareness and recognition. You want to stand out as the company who can provide the definitive solution to the customer’s problem.

Make a good first impression. You want a customer’s first interaction with your brand to set a positive tone for the rest of their interactions with you.

Provide a path to more information. This initial contact doesn’t need to answer every question possible, but it should make it easy for the customer to know where they need to go to get more information and make a decision.

Lifecycle marketing for the reach stage

A targeted reach marketing strategy leads to a larger pool of well-matched potential customers. The more leads in your pipeline, the more chances you’ll have to turn prospects into paying customers.

Your lifecycle marketing strategy in this stage could include any or all of the following:

Ads in trade publications and magazines.

Billboards and other advertising in malls, airports, and other public places your customers frequent.

Social media marketing through targeted ads, influencer partnerships, and an active brand social media account.

Search engine marketing through well-placed ads.

Search engine optimization through publishing and distributing high-quality content.

Referrals from existing customers.

Booths or staff at relevant conferences and networking events.

As an example, I’m currently in the final throes of National Novel Writing Month . In one month, I’m aiming to write a very rough draft of a novel, which is bound to need substantial editing.

AutoCrit , an automated text feedback tool, accurately identified me as a potential customer, so I got this ad on Facebook, which I find both useful and eye-catching:

Analyzing the reach stage

There are a few ways you can monitor the success of the reach stage. You could track impressions on social media, traffic to your website (direct and referred), new leads generated, and more.

You can also compare the amount you’ve spent on placing ads, partnerships, conference booths, and so on. Comparing this to the amount of revenue brought in allows you to calculate your return on ad spend ( ROAS ).

Finally — although this blends into the next stage of the lifecycle — you can also survey customers directly after they’ve completed a purchase. How did they hear about your company? What was their first impression? Why did they choose you versus your competitors?

The acquisition stage

You might see this stage also referred to as the engagement, consideration, or act stage.

In the acquisition stage, a customer makes some kind of contact with your company, perhaps through visiting your website, asking your support or sales team questions about your product, scheduling a demo, or starting a free trial.

This is a promising stage, because your customer is transitioning from having a passive interest to showing active engagement in your product. This is your opportunity to:

Build trust and credibility. Make it easy to find product information and pricing on your website, and ensure that it’s helpful, accurate, and actionable. This helps your customer make an informed decision. Consider putting together case studies or write blog posts on common use cases so that customers can picture themselves using your product. Touches like these highlight your brand as reliable and customer-centric.

Learn more about their needs and offer personalized solutions. If they’re talking to your support or sales team, coach those teams to be curious about the customer’s needs and to make personal recommendations for meeting those needs. Kind, easy, human connections like these are often the differentiating factor for customers when they’re considering multiple options.

Follow up with personalized outreach (but don’t spam). Send high-quality resources, let them know if they forgot something in their cart, or send a follow-up email to make sure they got the help they needed. Most customers appreciate thoughtful check-ins, but overly frequent or low-quality contacts will likely leave a bad impression, so be tactical in your communications.

As an example of high-quality, personalized outreach, I received this one while I was still homeschooling my elementary-aged kids:

Not only does the newsletter contain valuable information about homeschooling, it also highlights discounted materials, so the value of the newsletter is demonstrated on a few levels.

Lifecycle marketing for the acquisition stage

Your marketing strategy for this stage will likely involve a combination of channels:

Your website, store, or blog and any customer contact forms.

Live chat widgets and social media (including direct messaging).

Email, both inbound and outbound.

Phone support.

You’ve driven a lot of potential interest in the reach stage, and now in the acquisition stage you’re moving customers forward toward making a purchase.

Analyzing the acquisition stage

Understanding how you’re performing in the acquisition stage often requires a little work and is dependent on your marketing channels. You can track metrics like email engagement rates, support and sales inquiries, and the volume of sales leads moving through this stage.

You can also measure overall engagement in this stage by looking at hits to your blog and product pages and tracking your social media engagement metrics, like follower count, comment volume, content shares, and so on.

The conversion stage

Also sometimes referred to as the purchase stage, this is just that! It’s the moment a potential customer becomes an actual customer by buying a product or service from your company.

The benefit to business objectives in this stage is clear — every purchase means more revenue. But it might be less clear why the customer experience is so important at this stage.

Providing an easy and smooth purchase process demonstrates your respect for customers’ time and signals to the customer that purchasing your product was a good decision. It also lays the groundwork for future purchases, since they'll know how easy it is to get access to the thing they need.

Lifecycle marketing for the conversion stage

This stage is a good time to make live chat or phone support extremely accessible. When a customer is on the verge of buying your product, you want to make it easy for them to get instant answers to any questions that might prevent them from hitting that button to complete the transaction.

You’ll also want to try to anticipate questions the customer might have at this point. These might be questions like:

How do they get started with their new software?

When can they expect their order to arrive, and how do they track it?

What do they do if something is broken in the app or the product is the wrong size?

If the product is a bad fit, what kind of return or refund policy do you offer?

Consider providing answers to these questions on your sales page, in an order confirmation email, or through a pop-up widget offering help resources. Proactively answering these questions reinforces that new customers can expect a good support experience from your company. They also help to transition the customer to the next stage more seamlessly.

Lastly, thank the customer for their purchase! I have a couple of recurring subscriptions with Copper Cow Coffee , and after every order I get a sweet and helpful thank-you note from them:

Analyzing the conversion stage

We’ve already mentioned some helpful metrics and data to look at when trying to assess success in this stage, but two are particularly important: conversion rate and customer acquisition cost (CAC).

If you’re a SaaS company, your conversion rate might be the percentage of deals your sales team closes. If you use a freemium model, it might be the percentage of free trials that convert to paid accounts.

However you measure it, increasing your conversion rates is an ongoing process of testing, iterating, and measuring the results.

We have a guide to calculating customer acquisition cost if you’d like more details on this key metric, but the basic formula is:

CAC = marketing + sales costs / number of new customers acquired

Tracking your CAC will help you understand the financial health of your business. If it costs you $100 to acquire a new customer, you need to make sure that the lifetime value of those customers is more than that.

Recommended Reading

A Complete Guide to Customer Acquisition for Startups

The onboarding stage.

Companies that include this stage in their customer lifecycle sometimes call it the customer success or implementation stage.

This is the stage in which you make sure your customer knows how to use and get the most out of the product they purchased from you. Software and technology companies are very likely to include this stage in their customer lifecycles, while ecommerce companies are less likely to include it.

Lifecycle marketing for the onboarding stage

Customer onboarding is key in many situations, especially if your business relies on a subscription model with recurring income. Since a customer's understanding of how to use your product effectively directly impacts the value they receive, without proper onboarding, you’re more likely to get unsatisfied customers and increased customer churn.

Giving new customers the tools to use what they've purchased increases their confidence and decreases uncertainty, both of which makes retaining them down the road much easier. Lifecycle marketing in the onboarding stage often involves resources like onboarding email sequences, digital courses or webinars, or step-by-step guides.

For example, Astrohaus , the makers of the distraction-free e-typewriter I recently purchased, sent me this super helpful onboarding email after I connected my device to their content management system for the first time:

Freewrite devices are very specialized and have something of a learning curve, so this was a welcome email in my inbox. In addition to confirming the first sync was successful, it explained some key features of the product (writing under a time goal and using markdown to format my writing after it’s been synced). It also anticipated some questions I had, like how to change the font size and my keyboard language.

Analyzing the onboarding stage

Measuring the success of your onboarding stage will depend heavily on your product and your customers. When I worked at a project management company, one of the ways we measured the success of our onboarding process was how many features of the product a customer used during their first week on the platform.

For instance, we tracked whether they created a certain number of projects and stories, whether they invited a minimum number of team members, whether they customized their workflow states, and so on.

If a customer didn’t successfully hit those milestones, we considered them at risk, and this would trigger a follow-up with their customer success representative to help them get back on track.

You can also measure things like engagement with the various resources you’ve created (like an email sequence) and the number of customers who cancel within the first 90 days.

Customer Onboarding: Steps, Examples, and Best Practices

The retention stage.

In the retention stage, you're focused on keeping your customers engaged and satisfied with their purchase and with your company.

Some companies will also consider the opportunity for expansion to be a part of this stage, because if your customer can see the value of a product they've already purchased, you can likely make a case that your other products will be a good fit for them as well.

Lifecycle marketing for the retention stage

It's important to highlight here that customer retention isn't just about keeping them from leaving — it's about actively enhancing their experience so that they’re enthusiastic about staying a customer.

This means that you'll want to build and nurture a relationship with your customers by:

Providing stellar customer service and self-help resources.

Seeking their feedback and advice and making improvements so that they become your partner in the product.

Keeping them updated on new features and products.

Continuing to offer personalized recommendations and discounts for new products or subscription upgrades that would be a good fit.

Trying to bring back churned customers by offering special discounts for returning.

reMarkable , for instance, is skilled at keeping me engaged with their brand by sending me notifications whenever a major firmware update is released for my writing tablet:

And Speechify , which I canceled a while back, has consistently sent me reasonable outreach emails with tempting discounts if I resubscribe:

Analyzing the retention stage

The retention stage is the best time to calculate customer lifetime value (CLV) . Here’s the basic formula:

CLV = customer spend per year x customer lifespan in years

Knowing the CLV for customers is vital to understanding whether your related strategies make sound business sense.

This is also a good stage for tracking renewal rates, customer sentiment, and customer satisfaction.

What Is Customer Retention + 16 Proven Retention Strategies

The advocacy stage.

Also sometimes referred to as the loyalty stage, this is the stage in which you help your customers become power users who drive additional growth for your business. Many customers may not make it to this stage, but those who do become multipliers for every other stage in the customer lifecycle.

They amplify your reach through word-of-mouth advertisement. They become expert users who can serve as informal advisors to new and existing users, which additionally improves your onboarding, retention, and expansion. Their advocacy is a testament to the worthiness of your product, thus boosting your company's success.

Lifecycle marketing for the advocacy stage

You can nurture and reward these users by:

Giving them access to special programs and perks like discounts, referral programs, and VIP events.

Inviting them to closed beta programs or to be the first batch of users who get access to new features and products.

Inviting them to closed user communities or to become guides and resident experts in open user communities.

Recognize them with badges and awards that celebrate their milestones with your product.

Starbucks recently rolled out a beta program called Odyssey, and because I’ve bought, erm, perhaps more than my fair share of coffee from them, I also have access to premium benefits:

Analyzing the advocacy stage

The benefit of many of these advocacy stage efforts is that you can see their direct effects on your revenue. Referral and affiliate programs both bring clear revenue streams that you can trace back to specific power users and campaigns, giving you more insight into which strategies work and which don’t.

This is also a natural stage in which to track metrics like Net Promoter Score and referral-driven revenue.

From disjointed to seamless experiences — the customer lifecycle brings it all together

We've looked in depth at the whole customer lifecycle, exploring each stage — reach, acquisition, conversion, onboarding, retention, and advocacy — and uncovering their unique contributions to both customer experience and business success.

Understanding and effectively managing the customer lifecycle is more than just a business strategy — it's a holistic approach to building lasting relationships. It’s about creating a seamless experience that meets and exceeds customer expectations, fostering a lasting sense of trust and brand loyalty.

Creating a strategic plan for managing each stage of the customer lifecycle translates into tangible business growth. As you get started, just remember that the customer lifecycle is always evolving. Stay adaptable, be receptive to feedback, and keep aiming to build a better customer experience.

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Steph lundberg.

Steph is a writer and fractional Customer Support leader and consultant. When she’s not screaming into the void for catharsis, you can find her crafting, hanging with her kids, or spending entirely too much time on Tumblr.

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Drive Customer Loyalty and Revenue Using Customer Lifecycle Management

Having a well‑thought‑out customer lifecycle management strategy is key to improving customer retention. This article dives into the different stages to help you implement it in your business.

A great sales team isn’t just focused on individual deals. It’s always looking at the bigger picture and seeking to create happy repeat customers for the long term. One of the best ways to develop loyal customers is to optimize the customer experience over time by implementing a customer lifecycle management program.

This article will explore what customer lifecycle management is, why it has become such an important part of today’s sales process, and how you can use it to make a lasting difference with your customer base.

What is the customer lifecycle?

The term customer lifecycle describes an overview of the customer journey through their interactions with your business. The journey simply refers to the path potential customers take when encountering your business and the steps that follow as they hopefully move toward conversion, or purchase, and beyond.

It’s worth noting that the customer lifecycle is not necessarily a linear journey. Customers may not follow the same route from one step to another. The best customer lifecycle strategy is one that is flexible enough to accommodate these differing customer paths.

The customer lifecycle management process outlines the 5 stages that your customers are likely to visit in their customer journey. For maximum effectiveness, each of the customer lifecycle stages should be guided by a different marketing strategy that is personalized to meet the needs of the customers occupying that particular stage.

Why is customer lifecycle management important?

Knowledge is power. Customer lifecycle management is founded on the understanding that the more you know about both your existing and new customers, the better you can serve them. Success means better customer experiences, and better customer experiences drive stronger customer relationships and brand loyalty, both of which fuel sales.

In your customer lifecycle model, each stage in the customer journey should reward you with intelligence that will help you create the relevant content needed to keep customer engagement high. Understanding this data is your key to a deeper, more meaningful connection with your customer base all the way to purchase.

For example, a rewards study conducted by Mastercard showed that when cardholders receive personalized offers, issuers see an “up to 18% spend lift from those who redeem, and a 75% reduction in churn.”

Let’s take a closer look at the key ways a customer lifecycle management strategy can benefit your business momentum and success.

Uncover valuable insights about your customers and business

Regular and repeated evaluation of the customer journey stages leads to a deeper understanding of your customers’ needs, preferences, and goals. Patterns of behavior might also emerge that you can incorporate into your marketing and planning.

The customer data may also validate important customer feedback about your product or service. These insights can influence the focus, direction, and timing of research and development as well as product design. In other words, what’s learned from your customer lifestyle management process can directly impact numerous facets of your business operations.

Optimize the customer journey

Organizing your customer strategies around the 5 stages of customer lifecycle management equips you to match the medium and message to the customer. Rather than a one-size-fits-all approach, you can tailor how you engage based on where the customer is in their customer journey.

Capturing the loyalty of your customers requires a level of personalization that conveys an understanding and respect for that person. This applies not only to the unique demands of each individual customer lifestyle management stage but also the learned preferences of that customer. Delivering the right message at the right time in the right place can help shorten the path to purchase.

Improve the customer experience

Among the most powerful benefits of your customer lifecycle management strategy are the improvements you can make to the customer experience. Mine the insights from the data you collect to consistently improve and refine over time how you help the customer move from stage to stage.  

By removing as many barriers as possible, both proactively and reactively, you make the customer experience as friction free as possible. An ongoing commitment to improving all the touchpoints in the customer journey can help accelerate the person’s evolution into a lifelong buyer for your business.

Increase customer loyalty

This might be the most important benefit of all. Devoted customers will continue to use your products or services. They are typically more open to new offerings and will often adapt more willingly to increases in price. Happy existing customers also often tend to spend more over time than others.

But that’s not their only contribution. These happy customers are also more likely to express their love of your brand to others, advocating for you to their network. In this way, they augment your own marketing programs, perhaps even cutting steps out of your customer acquisition process. A customer lifecycle management program can help them feel valued, inspiring them to remain brand ambassadors for years to come.

Boost customer lifetime value (CLV)

What is meant by customer lifetime value (CLV) ? In the most basic terms, CLV refers to the amount of money an individual is predicted to spend with your business for their customer lifetime. But it’s also more than that. The CLV really seeks to quantify how valuable the customer will be to your business over time by looking forward rather than back as customer profitability evaluations do.

It’s a critical metric as a higher CLV means that you have more committed customers. CLV is also valuable for helping determine customer segmentation, measuring brand loyalty, shedding light on how your marketing efforts are working, and helping you judge product quality.

How to calculate CLV

If you’re curious about your CLV, you can estimate it by following these 4 steps:

Step 1 : Forecast a customer’s lifecycle with your business.

Step 2 : Estimate future purchases to forecast future revenues.

Step 3 : Estimate the costs associated with producing and delivering future products.

Step 4 : Calculate the current value of those revenue amounts.

For more help tackling your CLV, check out “ Customer Lifetime Value: Why It Matters & How to Calculate It .”  

What are the 5 customer lifecycle stages?

Just as a map can help you understand a geographical location, possessing an understanding of each customer lifecycle stage can help you unlock the potential impact and power of your customer lifecycle management strategy.

While a variety of different customer lifecycle paths have been developed, many still rely on the 5 stages developed by marketing analysts Jim Sterne and Matt Cutler in their 2000 paper, “ E-Metrics. Business Metrics For The New Economy .” In their model, there are 5 stages that include:

• Acquisition

Each customer lifecycle stage contributes to the full arch of that customer’s engagement with your brand. It starts with them learning of your business, product, or service; you educate them about why it’s worth their attention; evolving them into a paying customer; and hopefully ultimately growing them into a repeat customer and long-term brand advocate.

It’s important to note that given the importance of customer retention, you’ll likely move your customer base through the 5 stages many times during your relationship with them.

Stage 1: Reach

The first stage represents the prospective customer learning about your brand, product, or service. They may have discovered you through research, customer reviews, or word of mouth. The name of this stage refers to it being your opportunity to reach the prospect during the early part of their evaluation process.

Useful tools at this stage can include social media, digital ads, search engine optimization (SEO), and marketing. The goal is not necessarily to sell during this stage but to build that connection between your brand and the prospective customer’s needs—whether that’s today or down the road—and to get them to request more information.

Stage 2: Acquisition

During this stage, it’s all about solidifying your relationship with the prospect. As the name suggests, you are looking to acquire and add them to your customer base. You do this by building on what they may already know about your company and inspiring them to take a follow-up step.

This next step might be to spend time on your company website or visit a store to see and test your product. It could be a request for a product demo to dig a bit deeper into the details. It might also involve checking in with a sales representative. In nearly all these cases, your dedicated sales and customer service representatives will play an important role.

Stage 3: Conversion

In this stage, your focus is to turn the prospect’s interest in your brand into a purchase. It’s time to apply what you’ve learned in the previous 2 stages about the customer’s priorities and needs and then demonstrate how your product or service is superior to competing alternatives. Offering a clear, seamless buying process is critical in this stage.

Once you’ve converted the prospective customer into an existing customer, you can start working to ensure they become a repeat customer. This requires looking ahead and thinking about what you can do to further enhance their customer experience and strengthen their brand loyalty. Proactive customer service is always important but increasingly so here.

Stage 4: Retention

At this point in the customer lifecycle, you’ve created a new customer. Now the objective is to retain them by helping them get the very most out of your product or service and tapping them to learn how your product and experience can be improved.

Personalized experiences are a great foundation for nurturing retention. You know a lot about your customer by this point. Create a customer experience that reflects that. You can also build on your knowledge through surveys, events, and even contests. Consider offering exclusive deals, discounts, or bonuses as they can help prepare the customer for stage 5.

Stage 5: Loyalty

You’ve reached the final stage in the process. The name says it all. It’s about creating long-term, happy customers. They are satisfied, avid users of your products or services. They buy consistently over time, regularly purchasing more of your products and/or reliably renewing their subscriptions.

You know your customer has reached this stage when they become brand advocates, recommending you to family and friends. They are truly more than customers; they are brand champions who share your story in reviews, on social media, and across their network. But remember, brand loyalty all starts with effectively managing the first 4 stages and keeping the customer satisfied over the long term.

How to build an effective customer lifecycle management strategy

The most successful strategies tend to have certain ingredients in common. As you look to create or adapt your own, here’s a list of key steps and considerations to think about as you move forward.  

Define your target audience

The customer lifecycle must naturally start with the customer. The better you define your target audience, the more likely you are to reach them. Determine their preferred communication channels, their pain points, when they usually start their customer journey, and what they like most and least about the products or services they’re currently using.

A targeted campaign crafted around these details will be more effective and return more meaningful customer data that you can apply to subsequent stages.

Share relevant content with potential customers

Once you know your target customer, you can create specific content that they will find relevant. Think of your website, blog, webinars, and social media efforts. With every communication, test that the material reflects the interests and needs of your potential customer and existing customer base.

Also, remember to use the channels preferred by your customers. Then track what is working the best. Social media is a great tool for testing. Use the customer data to adapt and refine the content.

Provide quality customer service

Customer service can be a superpower as you seek to move people through the acquisition stage of the customer lifecycle. An effective customer service team can power the relationship building and product/brand education that will fuel success in the stages that follow.

Customer service is an especially important feature of building brand loyalty and allows you to consistently connect with customers through each customer lifecycle stage. These customer touchpoints also provide data you can use to improve the overall customer experience.

Offer customer self-service options

Customer service can begin before a purchase is made. As you manage the acquisition stage, think about offering convenient self-service options . It could be a chatbot or FAQ page to address simple common questions of your target audience. Feedback widgets, interactive product demos, and knowledge bases are other great self-service tools.

In addition to helping customers, these resources can reduce the burden on your customer support team, freeing them to address other issues. Finally, sales representatives can proactively use the self-service tools and direct prospects to a product demo, for example.

Make the purchase stage easy

The conversion stage of your process will be best served by making purchasing as seamless as possible. Empower your customers by providing a clear, user-friendly, intuitive online ordering system and easy-to-use in-store tools.

Confusion and frustration here can mean lost leads and compromise your brand’s reputation. Also, remember that you’re collecting valuable customer data at this stage. Consistent improvement of the purchase stage will yield great dividends with customers appreciating the thoughtful customer experience.

Give customers a personalized experience

Regarding customer experience, your ability to offer a personalized customer lifecycle is key to retention. Once a nice-to-have, tailored experiences are increasingly the norm and expected by consumers. How well you adapt your engagements to your customers’ individual tastes, preferences, and needs will help determine whether they become loyal customers or not.

Some examples could include customized offers or discounts on items they previously searched for and early-bird alerts about deals on products they’ve already purchased. Informed by data, these personalization efforts can also return useful new customer data.

Gather feedback from your loyal customer base

The customer lifecycle management process is really a conversation between you and your prospective customers and existing customers. It’s personalized, relevant, and consistent across the customer lifecycle stages. One way customers can participate is through feedback you invite along the way.

Options span all types of surveys and feedback from your website and widgets in-app. Your customer-facing teams are also valuable resources for customer thoughts and recommendations. But the feedback is only as meaningful as your ability to use it to improve the customer experience.

Prompt referrals from repeat customers

If you succeed in getting a customer to the loyalty stage of the customer lifecycle, the benefits for your business can be significant. Not only are they repeat customers offering a potentially great CLV, but they can be very effective brand advocates. Encourage them to refer others and then provide an easy way for them to do so. Referrals are an inexpensive way to acquire new customers.

In fact, a 2020 study showed that referred customers are 18% more loyal and have a higher CLV than other customers. Offering incentives, commissions, or discounts for referrals can be an effective way to gain and sustain interest among your existing customers. 

Six best practices for customer lifecycle management

Each company employs customer lifecycle management in its own way. But the aim is likely to be the same: Harness your data to become experts about your customers and then use that knowledge to create a superior customer experience at each stage. As you develop your own strategy, keep these 6 recommendations in mind.

Tip #1: Chart your customer touchpoints

Customer touchpoints are the foundation of any successful customer journey. These include all the ways in which you connect with your customers, from social media, email, and phone to app, digital ad, and in-store. Tracking your touchpoints helps ensure a positive interaction with customers at each one. By making the touchpoints part of your customer lifecycle analysis, you can learn how customers are moving through the lifecycle stages and use those insights to improve their experience.

Tip #2: Look at things from your customers’ point of view

Your customer lifecycle process needs to fit your customers. This requires developing a deep understanding of their needs, goals, and challenges. Consider developing detailed and segmented customer personas based on your customers’ demographic and behavioral profiles. Then, segment them using important differences like age, geography, income, and hobbies. When you design not only your offerings but also your customer lifecycle around the customer’s point of view, you forge a strong foundation for growth.

Tip #3: Identify pain points in the customer journey

Why are prospects not converting? What in the process is discouraging them from moving to the next stage? Why did they buy and then stop? Look to your data and solicit feedback from customers and the Sales team to identify the customer pain points. By identifying the obstacles and areas of friction, you can make adjustments to improve the process and the overall customer experience. In addition, it enables you to more effectively position your offering as the solution to their needs.

Tip #4: Use metrics to increase customer retention

Analyzing data and feedback is fundamental to customer retention. The better you understand your customer, the more likely it is you’ll be able to create an experience that turns them into loyal return customers. Metrics help you identify customer behaviors and preferences you can use to personalize your engagements. Not only will those engagements keep them coming back, but they can also drive long-term revenue. In addition, metrics can help you determine the cost of retaining customers and where you might find new efficiencies.

Tip #5: Don’t let your Sales team fall into silos

Sales teams are vital contributors to your success. Because of their direct personal interaction with customers, sales representatives possess some of the most valuable customer information and feedback. When siloed, any key insights fail to be included in persona development, customer lifecycle plan development, and ongoing execution. Conversely, without open communication and collaboration, the Sales team may miss out on incorporating this crucial customer data.  

Tip #6: Make use of customer lifecycle software

Customer lifecycle marketing software offers a valuable window into how your customers interact with your business at different stages of their buying journey. It can track customers’ habits, purchase history, post-purchase experience, and engagement across different channels. You can use this information to create customer profiles, segment your customers, and develop personalized messaging. Over time, the data-driven insights garnered from your customer lifecycle software can help you minimize churn and increase CLV.

Most common kinds of customer lifecycle management software

There is not just one flavor of customer lifecycle management software. As you evaluate the different options, keep your business and its needs front and center. Think about your industry and the size of your company. Spotlight desired features related to aspects like integration, automation, analytics, and segmentation. Does brand matter? How about ease of use? And then there’s always cost.

To give you a head start on making the right choice, here’s a quick rundown of some of the more common software options available. Which one is right for you?

Content management system

A content management system (CMS) is ideal for you if you need help to create, organize, and store media and other files for use on a website. With a CMS, even non-technical team members can develop, edit, and publish content without knowledge about web design or coding languages. These applications are necessary for streamlining web operations for companies of all sizes, but especially small and midsize businesses lacking a dedicated IT department. 

Using CMS tools, you no longer need to outsource the management of your website. You’re able to streamline content creation, editing, publishing, and updating web pages on your own. The system also helps with SEO and security while allowing authors, editors, and administrators to manage media and files used to create site content. Finally, a CMS can even provide insight into how well your content is actually performing in the marketplace.

Help desk software

Help desk software typically refers to the system that addresses your customer queries, enabling your Support team to track user requests and deal with other support-related issues. Sometimes referred to as services desk software , it provides a single point of contact to follow the progress of customer issues, prioritize tickets, and connect with customers on their preferred channels. 

Help desk software does this through a combination of prioritization, categorization, automated routing, service-level management, and escalation capabilities. It can also directly support how your help desk agents and processes interface with your other IT service management processes.

Customer relationship management system

At its most basic, a customer relationship management (CRM) system consolidates customer information and documents into a single database. More specifically, CRMs offer a powerful mix of practices, strategies, and technologies to help you manage and analyze your customer interactions and data throughout the customer lifecycle.   

With the goal of promoting customer retention and sales, a CRM collects your customer data across your different channels and touchpoints. This data, which can be available to different groups across companies of all sizes, includes key details like the customer’s purchase history, preferences, and needs. The benefits of a CRM system span better customer service, new customer insights, and the automation of certain sales and support tasks.

See real growth with customer lifecycle management

More than ever, your business success is tied to how well you know your customers. Customer lifecycle management offers you a powerful tool for delivering for customers at each of the 5 stages of their customer journey. By using your deep knowledge about them to create personalized experiences along the way, you inspire loyal brand advocates while also growing your bottom line.

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Customer Lifecycle: Definition, 6 Stages & Advantages

The customer lifecycle describes the consumer’s process when they first notice and consider and buy your product, use it, and maintain brand loyalty.

Understanding the customer cycle is crucial as it allows companies to maximize revenue and remain competitive in today’s marketplace.

Tracking the customer lifecycle requires considering each step of the process and terms like customer retention, customer care , and customer loyalty, which help create strategies to optimize the customer experience.

LEARN ABOUT:  Retention Rate

What is the customer lifecycle?

The Customer lifecycle concerns aligning a company’s business management with the customer journey . 

That is, to systematize the commercial strategy concerning the customer’s contact points throughout their life as a consumer, from when they arrive until they leave the company.

Customer touchpoints can be executed proactively based on where they are in the lifecycle or reactively through business alerts based on their behavior.

Importance of understanding the customer life cycle

The customer cycle allows you to build strong brand loyalty and get users to become advocates for your company, recommending it to their friends, co-workers, or family members. To achieve this, you need to make sure you remain relevant and offer value to customers.

Understanding the customer lifecycle is essential to your business’s continued success and growth. If you ignore any of the stages of the process, it is possible that customers will be dissatisfied and leave in the future.

Companies must work on each of the stages that make up the customer lifecycle and use metrics to measure the success of each of them. This way, it will be possible to address competitive gaps in products and services.

Learn more about the importance of a Buyer Persona. 

Measure all the stages of your customer life cycle touchpoints with QuestionPro CX. Request a demo of our customer experience management software to turn detractors into promoters of your brand.

Advantages of monitoring the customer life cycle

Next, we have for you the main benefits of carrying out the review of the customer cycle process in your organization:

The relationship with customers improves

By having more knowledge of your customers, they are satisfied to know that you care about their needs. This allows you to create a stronger connection and deeper relationship with them.

The solution to consumer needs

If you know the needs and desires of customers, you can find a quick and effective solution to their problems.

Improvements in customer service

If your employees learn about customers, they can serve them better. By knowing the records of your interactions, they will be able to act on that knowledge.

You increase employee satisfaction

Employees who are more knowledgeable and trained will be more engaged. By knowing the customer life cycle, they can quickly solve problems.

Increase the profitability of your company

When your organization learns about the customer life cycle and puts it into practice, productivity increases, the closing process is reduced, and you have the facility to offer extra products and services to increase customer satisfaction.

Solid customer base

Your sales team can better schedule customer meetings and resolve customer concerns. By having a solid database with clients and prospects, everyone can access it equally.

LEARN ABOUT: Client Management

Decreases customer churn rate

When a customer engages with your employees, the risk of them leaving decreases.

Customer lifecycle stages

Managing the customer lifetime will be impossible unless you conduct a customer lifecycle analysis, which will show you how your customers are currently going through the pipeline.

The customer life cycle consists of six stages. Next, we will describe each of them so that you can easily understand the process:

This is the first stage of the customer cycle when he becomes aware of the existence of a product or service from your company. This knowledge could be through social networks or a word-of-mouth recommendation. The client may not have an immediate need to solve, but the goal is that in the future, they can associate with your brand to find a solution.

In the next stage, the client creates an association between their need and your brand, the process deepens, and they acquire more knowledge about it from offers, visits to your website, conversations with your sales team, or using samples of your product.

This is the stage of the customer cycle where your product or service is purchased. Identifying the key points that led to closing the deal and using them to position your products and have a more significant competitive advantage is crucial.

Here are the people who have already bought your product and can be considered customers. At this stage, the focus is to create a strategy that will increase the value of the sale, which will cause an increase in ROI.

Product and support experience

It is the next step in the customer’s lifecycle and one of the most important since different studies show that getting a new customer is easier than retaining current ones.

Now that you have achieved a new sale and a consumer in your database, the objective is to help obtain customer satisfaction by giving value to your products and services. This can be through a customer satisfaction survey , which allows you to understand and fix any problems during the sale.

Bonding/Advocacy

The ultimate goal in the customer sales cycle is to maintain customer loyalty. Satisfied customers continue to use your products or services and even choose to obtain additional ones and increase the cost of sale. In addition, they will become ambassadors of the brand and recommend it to others.

Learn About:  Customer Care vs Customer Service

How To Manage the Customer Lifecycle

Managing the customer lifecycle is a strategic process that involves understanding and optimizing the customer’s journey with a brand from the initial contact to becoming a loyal advocate. Here are some key facts to effectively manage the customer lifecycle:

Understanding the customer lifecycle

To successfully manage the customer lifecycle, it’s crucial to have a comprehensive understanding of the various stages your customers go through while interacting with your business. This includes being aware of your brand, considering your products or services, making a purchase, having post-purchase experiences, and potentially becoming loyal advocates.

Personalization and segmentation

Today’s customers expect personalized experiences that cater to their unique preferences and requirements. Collecting and analyzing customer data allows you to segment your audience into distinct groups based on behavior, demographics, purchase history, and preferences.

Exceptional customer service

Providing exceptional and proactive customer service is a cornerstone of a successful customer lifecycle management process. Promptly addressing customer inquiries, concerns, and issues demonstrates that you value their satisfaction and are committed to resolving any problems they may encounter. 

You must train your customer service team to proactively connect with your consumers in order to handle any issues, aid them in making a purchasing choice, and even offer them samples or demos to familiarize them with your products.

Customer onboarding

For new customers, the onboarding process plays a vital role in setting the tone for their entire relationship with your brand. A smooth and welcoming onboarding experience helps customers quickly understand and use your products or services effectively. 

Continuous improvement

Customer needs and preferences evolve over time, and market dynamics change. It’s essential to continuously gather client feedback and analyze data to identify areas for improvement in the customer journey. Customer surveys, feedback forms, and sentiment analysis can provide valuable insights into customer satisfaction and pain points.

Customer retention strategies

Acquiring new customers can be more expensive and challenging than retaining existing ones. Implementing customer retention strategies is vital to keep customers engaged and coming back for repeat purchases. Loyalty programs, personalized offers, and exclusive perks for loyal customers can incentivize repeat business.

Measure key metrics

Measuring and tracking key performance indicators (KPIs) related to customer lifecycle management is essential for evaluating the effectiveness of your strategies. Important metrics include customer retention rate, churn rate, customer lifetime value, and Net Promoter Score (NPS).

Automation and technology

Leveraging automation and technology can streamline and enhance your customer lifecycle management efforts. Customer Relationship Management (CRM) software can help you centralize customer data, track interactions, and segment your audience effectively. 

Marketing automation tools enable you to deliver personalized messages at scale, ensuring consistent and relevant communication with your potential customers.

How QuestionPro helps in managing the customer lifecycle

QuestionPro helps manage the customer lifecycle by providing a range of tools and features that enable businesses to collect, analyze, and act upon consumer feedback at different stages of the customer journey. Here’s how QuestionPro assists in managing the customer lifecycle:

Survey solutions for feedback collection

QuestionPro offers comprehensive survey solutions allowing businesses to collect feedback from potential customers at various touchpoints throughout the lifecycle. Businesses can create and distribute surveys to gather valuable insights during the awareness, consideration, purchase, and post-purchase stages.

Customer journey mapping

QuestionPro’s customer journey mapping tools enable businesses to visualize and understand customer journeys from the initial awareness stage to post-purchase experiences. This helps identify key touchpoints, pain points, and opportunities for improvement in the customer experience.

NPS and CSAT surveys

Net Promoter Score (NPS) and Customer Satisfaction (CSAT) surveys are essential in customer lifecycle management. QuestionPro provides pre-built NPS and CSAT survey templates, making it easy for businesses to measure client loyalty and satisfaction levels at different stages.

Real-time reporting and analytics

QuestionPro’s reporting and analytics features provide real-time insights into consumer feedback. Businesses can monitor customer sentiment, track trends, and identify areas for improvement promptly. Actionable insights help in making data-driven decisions to enhance the customer experience.

Closed-loop feedback management

QuestionPro allows businesses to close the loop with customers by automating follow-up actions based on survey responses. This ensures that client feedback is acknowledged and addressed promptly, leading to improved customer satisfaction and retention.

Customer segmentation

QuestionPro enables businesses to segment customers based on various criteria such as demographics, behavior, and preferences. This helps in personalizing interactions and marketing efforts for different customer segments, leading to a more tailored customer experience.

Integration with CRM systems

QuestionPro integrates with CRM systems, allowing businesses to combine survey data with other customer data. This customer data integration provides a comprehensive view of the customer lifecycle and facilitates better customer relationship management.

Automated workflows

QuestionPro’s automated workflows streamline customer feedback processes, ensuring that feedback is collected, analyzed, and acted upon efficiently. Automated notifications and alerts keep teams informed and responsive to customer feedback.

Customer insights integration

QuestionPro allows integration with various customer insights platforms, enabling businesses to leverage multiple data sources for a holistic understanding of customer behavior and preferences.

Check out our latest blog at QuestionPro to learn about Customer Loyalty Software . It could change how you keep your customers coming back!

The customer lifecycle is a basic idea in business strategy that focuses on nurturing and maintaining customers at various stages of their relationship with the company. Businesses can create amazing customer experiences, inspire loyalty, and turn customers into brand advocates by properly managing the customer lifecycle. 

This increases client retention and customer recommendations and gives you a competitive advantage in the market. Adopting a customer-centric approach and applying data-driven initiatives can lead businesses to long-term success and growth.

QuestionPro, a leading customer experience management platform, empowers businesses to optimize their customer lifecycle management. QuestionPro provides comprehensive survey solutions, customer journey mapping tools, and real-time reporting to collect valuable customer feedback and insights. Contact QuestionPro now to learn more or have a free trial!

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Frequently Asking Questions (FAQ)

The customer lifecycle matters because it directly influences customer retention, loyalty, and overall business growth.

The customer lifecycle refers to the entire relationship a customer has with a brand, while the customer journey focuses on specific interactions or touchpoints within that relationship.

Customer lifecycle management is the strategic process of managing and optimizing the customer’s journey with a brand to drive satisfaction, retention, and loyalty.

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Customer Lifecycle Marketing: Stages, Strategies, and Examples

10 min read

With how reliant SaaS companies are on customer retention and increasing lifetime value, it only makes sense that customer lifecycle marketing would become a core focus.

This guide will cover what customer lifecycle marketing is, the lifecycle stages, and how to create an effective lifecycle marketing strategy.

We’ll also go over a few examples of successful lifecycle marketing so you can apply the same principles to your own lifecycle marketing campaign!

• Customer lifecycle marketing helps you improve customer satisfaction , retention, and lifetime value by engaging with them throughout every stage of their journey .
• The five stages of customer lifecycle marketing are awareness , acquisition , conversion , retention , and loyalty .
• You can increase awareness by sharing helpful content on the platforms that your target audience spends most of their time on and running webinars (whether live or pre-recorded) to become an authority in the space.
• You can drive new user acquisition by engaging prospects through email marketing sequences and offering product demos.
• Creating a personalized onboarding sequence (based on data from a welcome survey ), A/B testing upselling prompts, or offering feature trials to users will help you optimize conversion rates .
• Using secondary onboarding flows, feature discovery checklists, and in-app messages are effective ways to get users to engage with the more advanced areas of your product.
• You can build loyalty through exclusive offers (e.g. the chance to beta test new features before they go live) and rewards like product credits, gift cards, or even cash.
• To create a customer lifecycle marketing strategy, you’ll need to set goals, create a strategy, choose metrics for tracking progress, and analyze data to optimize your campaign.
• You can automate various parts of the customer lifecycle marketing to streamline workflows and save your team members time.
• Get your free Userpilot demo today to start optimizing the customer lifecycle for those using your product!

What is customer lifecycle marketing?

Customer lifecycle marketing is a strategy centered on providing the most value to customers throughout every stage of their relationship with the business or product. This improves customer satisfaction, retention, and lifetime value — in that order.

Stages of customer lifecycle marketing

There are five stages in the customer lifecycle marketing process:

• Awareness. Prospects who have just found out about your product are in the awareness stage. Because this is the top of your conversion funnel, it’s essential that you hook them in so they keep going further.
• Acquisition. Leads who reach out through your website, email, hotline, or other channels are in the acquisition stage. This is your chance to answer their questions, learn about their goals, and explain how your product can solve the problems they’re facing.
• Conversion. If an engaged lead is satisfied with the answers you provide and confident that the product can help them, they will convert. The conversion event could include a free trial signup, paid subscription, or one-time purchase.
• Retention. The retention stage consists of a combination of collecting customer feedback , identifying reasons for churn , and acting on this data to ensure that repeat customers stay subscribed to your SaaS product for as long as possible.
• Loyalty. Customers who are exceedingly happy with a product will not only stick around long-term but also let their peers know about the solution. This turns them into a loyal advocate with high lifetime value and referral potential.

How to create a customer lifecycle marketing strategy

Because there are five distinct customer lifecycle stages, there are a few things you’ll need to create a consistently positive customer experience throughout the entire journey :

• Setting goals. Map out the entire customer journey and then set objectives for all stages of the customer lifecycle. These goals could include increasing awareness, improving lead nurturing, optimizing conversion rates, implementing retention strategies , or launching loyalty programs.
• Creating a strategy. These strategies could come in the form of marketing efforts, product improvements, or customer initiatives.
• Automating processes. Marketing automation can help you streamline certain workflows and use software to save time on recurring, trivial, and/or time-consuming tasks.
• Measuring performance. Depending on the stage, you will need different types of key performance indicators (KPIs) to evaluate the efficacy of your strategies, i.e. conversion rates for the conversion stage.
• Analysis and optimization. This will help you see which areas need improvement or which winners you should double down on. It might include A/B testing, customer interviews, and product experimentation .

Examples of customer lifecycle marketing strategies across stages

Starting out with tried-and-tested strategies will give you a solid foundation to optimize and experiment with over time. So here are some examples of customer lifecycle marketing strategies across stages.

The first stage of the customer lifecycle is the awareness stage. This is the part of your conversion funnel that the largest number of people will interact with, so you want to ensure you make a good impression.

The main focus in this stage should be increasing your reach and authority in the space.

Build awareness by sharing helpful content

Sharing helpful content through your company blog, social media, or using lifecycle email marketing will help you demonstrate expertise within your industry.

Which customer education and branding channels you choose will depend on a few factors such as:

• Where your target audience spends most of their time on
• Which channels you have the biggest presence on
• How much (if any) you can spend on paid ads

It’s generally best practice to go all-in on one or two platforms and then master them before expanding to new channels. This will ensure that your entire team is focused on building up the same audience rather than diluting their attention across half a dozen different platforms.

Host webinars on topics related to your industry or products

You can leverage webinars to establish yourself as an authority in the industry while simultaneously reaching more leads. In fact, hosting webinars can be one of the most efficient ways to generate, nurture, and convert leads all at once.

The only downside of webinars is that hosting live presentations can be very time-consuming.

As such, you should consider using automated webinar platforms like eWebinar . Products like these let you record a presentation once and then automate the webinar so people can attend it on demand — even if you’re not there to host it live.

Tip: The most contextual way to get people to sign up for your webinars is to include a registration card, form, or popup in your blog content so readers who’ve already gotten value from your content can join!

Acquisition

Once people know about your SaaS business, the next obstacle is getting them to reach out and become a captured lead that you can work on converting. Email marketing and live demos are the most straightforward ways to do this.

Let’s have a quick look at the two approaches so you can see which is the right fit for you — or do both!

Use email marketing to engage customers

Capturing leads in your CRM platform of choice — e.g. Salesforce or HubSpot — then using lead scoring to identify the highest-likelihood prospects will give you a good starting point for email marketing. You can then use targeted email sequences to engage, nurture, and convert these leads.

Offer live demos for new customers

Letting interested prospects book a live demo with your sales team is another way to acquire customers. During the demo, you can:

• show them how the product works
• address any concerns
• overcome any obstacles that may be keeping them from signing up for a paid subscription or free trial

One contextual way to offer live demos is through in-app messages. As soon as they sign up for your product, you can invite them to book a demo with your representative.

After raising awareness for your product and nurturing the leads that come in, you’ll need one more push to turn prospects into customers. Personalizing onboarding, A/B testing your in-app marketing , and offering a trial for premium features are all viable conversion strategies worth exploring.

Leverage customer data to deliver personalized onboarding

As soon as a new customer signs up for a trial, use a welcome survey to collect data on them.

These data points could include:

• Their jobs-to-be-done (JTBD) with the product
• Which tasks are involved in their workflows
• What their role in the organization is

Responses to welcome surveys will help you segment customers and personalize the customer experience based on their product use case. The insights you uncover will also help inform your onboarding best practices and playbook.

For instance, you could introduce them to the most relevant features to drive feature adoption .

A/B test different upgrade prompts to drive conversion

A/B testing lets you compare different variations of in-app communication flows — comprised of modals , tooltips , banners, and/or slideouts — to see what resonates with your use base the most. Multivariate testing can help you quickly identify the winner out of large sets of variations.

If you use Userpilot to run your A/B tests, then you’ll even be able to see the exact percentage that the winning variant beat the control by:

This helps you continuously tweak, test, and optimize your customer lifecycle model.

Offer premium feature trials to drive account expansion

The average customer’s journey toward joining the ranks of loyal customers is not just about user retention but also account expansion .

When aiming to encourage account expansion and increase customer lifetime value, offering free trials of premium features is an effective approach. You can apply this to users on free plans or those on lower-tier paid plans.

The goal is to provide users with a taste of the additional value available in higher plans, creating a sense of urgency and incentivizing them to upgrade:

Upselling customers so they use more features, subscribe to higher subscription tiers, and get more value out of the product is an absolute must. The more value received, features used, and money paid, the more sticky the product will become.

This creates mutual benefit between both the customer and the business.

Your work doesn’t end at the customer acquisition stage because post-purchase nurturing throughout the different stages is crucial to retaining new users long-term. You can achieve this through secondary onboarding flows and in-app marketing.

Use secondary onboarding to retain existing customers

Onboarding existing customers a second time to show them more advanced features will increase the amount of value they get out of the product over time. As such, continuous onboarding can help you engage new users and retain existing customers.

You can complete this entire process in just a few steps:

• Identify the new/advanced features that you’d like users to discover
• Create in-app feature discovery checklists (example below)
• Use interactive walkthroughs to guide users through tasks

Deliver in-app marketing messages to introduce new features

Sending in-app messages to your loyal customer base will help keep them in the loop on the latest product improvements, new features being added, and other developments that would increase product stickiness .

The final stage of the customer lifecycle is brand loyalty. This is where a user goes beyond becoming a repeat customer and starts actively recommending your product to others. There are a couple of ways to build loyalty amongst users: exclusive offers and mutually beneficial loyalty rewards programs.

Deliver exclusive offers to increase customer loyalty

Your most loyal and active customers are more familiar with your product than the average users. This makes them a prime candidate for beta testing new features and also makes them feel like their voice matters.

In addition to guiding your product development strategy, the user feedback you gather through beta testing can also be used to identify the most valuable features. You can then use these features and benefits as a hook to convert a potential customer after the update has launched.

Reward customers for sharing testimonials

Offering rewards to customers can encourage advocacy and turn satisfied users into brand ambassadors. Integrating a loyalty program into the customer experience doesn’t have to feel forced as long as you implement it properly.

For instance, you could use gamification to offer “quests” to users that they’re rewarded for completing. In most cases, you’ll want to tie rewards back to your core product — but you can also offer badges or trophies to enhance the gamified experience.

For example, the Surfer Credits Giveaway offers credits to customers who leave a review for them on websites like G2 and Trustpilot as long as they send a screenshot as proof.

Of course, you can also offer good old-fashioned cash rewards or gift cards — like how we at Userpilot give out $100 Amazon gift cards to our customers who review the product on G2:

As you can see, customer lifecycles can be a long, multi-stage journey. if you’re able to stay by their side throughout each step then most customers will turn into loyal brand advocates that generate more revenue for your business and spread the word about your product.

If you’re ready to start nurturing your users through in-app marketing and contextual onboarding, then it’s time to get your free Userpilot demo today!

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• What is the Customer Lifecycle? Definition, Stages & Measurement

Introduction

The customer lifecycle is a way of looking at the entire process of a customer’s relationship with a company. The customer lifecycle refers to the whole experience of buying something and using it, including all the different phases in between.

This article will explore the customer lifecycle and its importance to your business growth.

What is The Customer Lifecycle?

The customer lifecycle is a model that shows how customers interact with a product, service, or brand. It includes not just the time they spend with your product or service, but also their previous interactions with you and their current relationship with you.

The customer lifecycle begins with the customer research phase when you identify who your target market is and what they want. You then move to the sales process during which you build relationships with your potential customers. 

After this phase, you move into the implementation phase where you start taking action on what you learned from your research and sales process. Finally, you enter a maintenance phase where your work is done and any new developments need to be made based on feedback from past customers.

Importance of Understanding The Customer Life Cycle

It’s important to understand this lifecycle because it helps your company see how you can use the full breadth of your business and not just your products and services to engage with customers and grow relationships at every stage. Understanding the customer life cycle can help companies make better decisions about marketing, product development, and sales.

It will also help you think about how various stages of the process affect your business, and it can help you understand what you should be doing to engage with new customers and retain existing ones.

What Are The Stages of The Customer Lifecycle?

• Awareness : This stage is when a customer learns about your product or service in some way. For example, it could be through an advertisement or through word of mouth from a friend who has used your product or service before (or doesn’t know you exist).
• Engagement : In this stage, you have drawn their attention to what you have to offer and convinced them that they want more information about it (or maybe even done some marketing to help them determine if they do). 
• Evaluation: At this point in the lifecycle process, the customer may have decided that they are interested in exploring other options as well as making a purchase decision regarding what they’re interested in purchasing (if they don’t decide then they won’t continue past this point). 
• Purchase : This is where customers decide to buy a product and make their first purchase decision. They may read about it online, talk to friends about it, or even try it out firsthand at a showroom or store before making the final decision to buy. Once they’ve made their purchase, they become loyal customers who are likely to continue using the product’s services and support for years to come.
• Product and support experience: The initial stages of the customer lifecycle involve understanding what your customers want and how to provide it to them. This includes learning about their needs, wants, and preferences; understanding their pain points; anticipating what they might need in the future, and anticipating problems before they happen.
• Bonding/Advocacy: Once you’ve established a relationship with your customers during this phase, it’s important to continue building trust as you move forward into other stages of the lifecycle. A good example of this is when you reach out to a customer who has expressed an interest in becoming a loyal customer but hasn’t yet made a purchase, you can use this opportunity to build more trust by showing that you care about them and will go above-and-beyond for them if they choose to become your loyal customer.

Advantages of Monitoring The Customer Life Cycle

The benefits of monitoring the customer life cycle are huge:  

• You’ll have data and insights that will help you build stronger sales pipelines. 
• You will also have the opportunity to use the data collected to personalize customer experiences. 
• Customer lifecycle also allows you to precision marketing campaigns. 
• Another benefit of the customer lifecycle is that it helps you improve processes within your business, and drive collaboration across the organization.

How To Measure and Analyze The Customer Life Cycle

• New Customers Acquired: A company can have multiple products, services, or websites. So they should be able to track each of them separately. The acquisition is done by marketing campaigns that target specific audiences with advertising, social media posts, and newsletters.
• Reach and Engagement: Customer service representatives should answer questions and make recommendations based on the needs of customers who contact them with problems or other inquiries.
• Conversions/Sales : This would include purchases made by either physical retail stores or online stores that sell goods online. This stage also includes any transactions that occur as part of an agreement between companies that are not related directly to sales but which result in some kind of action taken by either party (such as an order being placed).
• Usage Frequency : This stage includes how often customers use their products or services over time without having to repeatedly reach out to them to take action.
• Customer Retention : In this stage, the customer has been using your product for a while and has become familiar with it. You can measure customer retention by looking at how long a customer has been using your product or service. You can also look into their purchase history; if they are still using your product or not, that’s a good sign they’re highly likely to stay loyal to you.
• Customer Queries Inflow : Check how the new customers are interacting with your brand online and becoming familiar with it. This usually occurs when customers are first trying out your products or services and they’re still learning about what kind of interactions they want to have with you. You can measure this stage by looking at how many queries come in per week or month from new customers who haven’t used the brand before. If there aren’t many queries coming in from new customers during this stage (which could mean they’ve already found something else that satisfies them), then it’s safe to assume these people won’t be returning any time soon.
• Customer Loyalty and Brand Advocacy : These are two key aspects of the customer lifecycle. The first is measured by looking at how likely customers are to return to a brand, while the second is measured by how likely consumers are to tell others about their experience with a brand. Customer loyalty, or the return rate of customers, is important because it shows how well a company has been able to engage with customers and make them feel like part of an ecosystem. If you have loyal customers who continue to buy from you even if your prices go up or if a competitor offers a better deal, then you have successfully created value for them. Brand advocacy is another important aspect of customer loyalty as it reflects how many people know about your brand and talk about it with others. This can be measured through surveys asking people whether they know about your brand, how much they like it, and whether they would recommend it to friends or family members.

How Formplus can Help  Customer Life Cycle Managers

Customer lifecycle managers are a crucial part of any organization, and Formplus can help them keep track of the information they need to do their jobs. Formplus offers over 1000 free form templates that can benefit all types of businesses.

If you are a customer lifecycle manager here are the things you can do with Formplus:

• With Formplus, you can create forms that allow customers to answer questions about their issues and concerns in one place, so that you can collect all the information needed to solve them. 
• You can also share those forms with other departments in your company and make sure everyone gets access to them. 
• And if you need more than just a survey, Formplus offers analytics so you can see how all the information collected from surveys aligns with your other data sources.

[Get Started For Free]

The customer lifecycle is an essential part of your business. You’ll want to make sure that you’re monitoring how many times your customers are using your product/service and whether those uses were positive ones.

To stay on top of your game, you can also start working on ways to improve the user experience so that people will keep coming back for more.

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• Customer Experience
• customer journey
• customer life cycle
• customer research
• Customer service
• Olayemi Jemimah Aransiola

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PurposeThis research seeks to provide a historical review of the life cycle concept in marketing. The paper aims to show the development of traditional life cycle models and links to the life course perspective.Design/methodology/approachThe authors relate to life events and transitions in consumers' life trajectories, life status, role transitions, and role identities as determinants of consumer behavior. The paper reveals future research potential in the field. Essentially, the authors demonstrate the need for life cycle models grounded on empirical data and discuss related methodological issues.FindingsThis paper provides a temporal systematization of theoretical and empirical life cycle research. The major outcome is an outline of conceptual and methodological research directions that enable researchers to follow the life course perspective and to derive empirically grounded life cycle models.Research limitations/implicationsProviding chronological literature compilations an...

Elizabete Cardoso

Customer-centric companies focus on sustaining relationships with customers in the long-term. For that purpose, it was pertinent to examine Customer Lifetime Value at the client of this Work Project – PCDIGA, a multi-channel retailer – and draw recommendations on the CLV model to be adopted by the company. Different iterations were tried, with a final model being recommended and applied to get insights on Customer Value at PCDIGA. Based on the insights, initiatives were suggested with the focus on increasing Customer Equity and differentiating customers based on their profitability.

Expert Systems with Applications

The more a marketing paradigm evolves, the more long-term relationship with customers gains its importance. CRM, a recent marketing paradigm, pursues long-term relationship with profitable customers. It can be a starting point of relationship management to understand and ...

Marketing Science

Andre Berrospi

The Customer Equity and Lifetime Management (CELM) solution is based on a decision-support system that offers marketing managers a scientific framework for the optimal planning and budgeting of targeted marketing campaigns to maximize return on marketing investments. The CELM technology combines advanced models of Markov decision processes (MDPs), Monte Carlo simulation, and portfolio optimization. MDPs are used to model customer dynamics and to find optimal marketing policies that maximize the value generated by a customer over a given time horizon. Lifetime value optimization is achieved through dynamic programming algorithms that identify which marketing actions, such as cross-selling, up-selling, and loyalty marketing campaigns, transition customers to better value and loyalty states. The CELM technology can also be used to simulate the financial impact of a given marketing policy using Monte Carlo simulation. This allows marketing managers to simulate several targeting scenario...

dauglas martin

Jacobo Riquelme

How do you take individuals who have never done business with your organization and work on them until some of them eventually become the best possible customers you have? This is the very question that this book sets off to address. We do so by proposing a different way to think about the above question — a new framework that is based on the concept of managing the tightrope between value that the firm creates for a customer and the value of a customer to the firm. Our framework is prescriptive; it gives the reader-specific guidelines on how to develop their best customer. By developing a customer, we mean the act of acquiring the customer for the first purchase, and then gradually adding more products and services to this customer's basket such that these products not only create value for the customer, but also reflect in the increased profitability of the customer over time. The framework is intuitive, yet rigorous. Our framework is set out in a language familiar to most readers but is also backed up with the language of mathematics and statistics. The framework suggests that the discipline of creating value is a science as well as an art. For instance, there is an art involved in using customer level data to generate insights, and there is an art involved in taking those insights and developing customer experiences based on them. But there is a science associated with taking the resulting insights and attaching 3 b782_Chapter-01.qxd 10/6/2009 3:37 PM Page 3

Moira K Clark

The number of customer management related research publications has increased significantly over the last decade (a 70 per cent increase); where key areas or themes have mainly focused upon subjects such as customer satisfaction, customer service, customer loyalty, customer relationship management and customer value. The number of published articles relating to customer relationship management appears to be on the decline, having peaked in 2013 (a 25 per cent decrease); whilst other key themes have remained fairly steady. This would suggest that new trends in customer management are emerging, or are on the increase. The objective of this paper is to explore and highlight current and future trends in customer management by means of a literature review of marketing and related journals/texts spanning the last twelve months. The outcomes of this review and their relevance to marketing and customer management include themes relating to getting the organizational culture right, as well a...

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Kireshma Ragesh

One of the most important tasks in marketing is to create and communicate value to customers to drive their satisfaction, loyalty, and profitability. In this study, the authors assume that customer value is a dual concept. First, in order to be successful, firms (and the marketing function) have to create perceived value for customers. Toward that end, marketers have to measure customer perceived value and have to provide customer perceptions of value through marketing-mix elements. Second, customers in return give value through multiple forms of engagement (customer lifetime value, in the widest sense) for the organization. Therefore, marketers need to measure and manage this value of the customer(s) to the firm and have to incorporate this aspect into real-time marketing decisions. The authors integrate and synthesize existing findings, show the best practices of implementation, and highlight future research avenues.

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Customer lifetime value: The customer compass

Traditional brand owners and retailers are increasingly encroaching into the e-commerce channel—and for good reason. After all, digital engagement with customers provides companies with valuable data on consumer behavior that allows them to optimize marketing and product development. In addition, by operating their own sales channel, providers retain control over user experience and brand image. Enter COVID-19, and suddenly the Internet is rapidly becoming the shopping channel of choice for more and more consumers, a trend that is likely to persist beyond the pandemic.

About the authors

This article was a collaborative effort by Max Ackermann , Karel Dörner , Fabian Frick, Marcus Keutel , and Philipp Kluge.

That said, the new e-commerce players also face a challenge: winning and retaining customers is an expensive affair. That is why it is crucial for success to invest primarily in those customers who are lucrative for the company in the long run. It is important to understand these customers intimately, to engage them with the right channels, and to tailor offers to their context and needs. This can only be achieved by drawing on customer-related metrics—of which customer lifetime value (CLV) is first among equals—and by interlinking them intelligently as the foundation for effective and efficient marketing.

“CLV is our core steering metric” Four questions for Emmanuel Thomassin, Chief Financial Officer of Delivery Hero

Just how important is clv for delivery hero.

Customer lifetime value is one of our core metrics. It’s a topic we’re driving intensively at all levels of the organization and we have set clear goals from which we can only deviate in exceptional cases. We use CLV to support our strategic and operational decisions, such as whether to enter a new market or whether to continue or end a marketing campaign.

So how do you go about that?

We have a standardized approach for all our markets. CLV monitoring is directly linked to our operational marketing systems and thus directly influences our investments. It is crucial to continuously adapt and improve the calculation of CLV and the corresponding operationalization in marketing. Initially, for example, we only calculated the cost of customer acquisition; meanwhile, we also know what it costs us to retain customers. Over time, we have learned an enormous amount, especially through monitoring in new markets and with the introduction of new business models.

Do you see a trend among your customers?

Perhaps the most important KPI-based analysis is breaking down customers into cohorts to fine-tune the targeting of marketing drives. Over the years, we have seen CLVs rising steadily across all our cohorts, even before Covid. Today, they are many times higher than the investments in customer acquisition and retention. This shows that our marketing measures, among them personalization, have a direct impact on the KPIs and thus on Delivery Hero’s success.

Do you still see untapped potential in the way you use CLV?

A major challenge is responding directly to improvements in the KPIs with measures designed for pinpoint accuracy, especially in marketing, and then evaluating these with precision. That’s something we are working on, aside from further refining our analytics and increasing their granularity to the level of geographical micro-cells.

Digitally aligned companies and start-ups have long been successfully applying and refining this approach (see sidebar, “‘CLV is our core steering metric,’ Four questions for Emmanuel Thomassin, Chief Financial Officer of Delivery Hero”). Many traditional manufacturers and retailers, on the other hand, still have some catching up to do. To make the most of the CLV approach and use it to manage their e-commerce business, they should adopt a long-term strategy and proceed systematically in three steps: collect data, determine true customer value, and target investments to the most valuable customers.

Collect data throughout the customer journey

To estimate the current and future value of customers and keeping privacy regulations in mind, companies need to collect relevant data points on as many customers and their behavior as possible over multiple years. This is because the corresponding analytical models are dependent on the availability of sufficient amounts of information to identify relevant patterns. The greater the volume of data available, the more meaningful and accurate the analyses. Three categories of data are required:

• Transaction data such as shopping timeline, product information, prices, method of payment, delivery, or returns are supplied by the e-commerce platform and the connected financial systems.
• Demographic data such as gender, age, occupation, and place of residence are condensed into customer profiles in order to better predict future shopping behavior and personalize marketing actions.
• Marketing data such as search behavior, response to campaigns, and external online data help to flesh out the respective customer profile and, in turn, deepen customer knowledge, including as regards preferences or purchasing behavior.

Despite ample data, it is often difficult to clearly identify customers throughout the entire customer journey. This is partly due to purchases made across different channels, for instance, in the company’s own online and offline stores or perhaps through third-party suppliers such as retail partners, which often do not require registration (with an e-mail address, etc.) for identification.

Successful providers solve this problem with an integrated customer database (customer data platform) that can recognize customers even when they do not sign in. For this purpose, profiles comprising as many attributes as possible are created for visitors to the various channels (based on browser data, among other things). Then, returning visitors (including to different channels) are identified by matching them against the full array of profiles compiled. Aside from linking different data sources and formats, the customer data platform also enables the integration of suitable external systems as well as customer segmentation according to behavior and demographic data. Key steps in this context include anchoring the system’s continuous improvement, but also data use by the organization’s departments from the outset.

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Determining the true value of customers.

What happens to the data collected? Here, in the second step, is where customer lifetime value (CLV) comes into play. This is because it can be used to measure a customer’s value, in the long term, over their entire time as a customer of the company. This value is compared with the customer acquisition/ retention costs (CAC), i.e. the marketing investments made or planned that are necessary to acquire and retain the customer. Finally, both indicators are linked to derive recommendations for action with regard to strategic and operational decisions (Exhibit 1).

A distinction is made between three levels of complexity when modeling CLV and CAC:

The descriptive model calculates CLV using historical consumer data and identifies behavioral patterns of customer groups mostly through simple manual analysis. This comparatively simple method yields rapid results, but they are merely hypotheses and therefore of limited value; they can only serve as an initial indicator of CLV for potential decisions.

The predictive model uses historical data patterns to determine future CLV. Consequently, the results are more accurate and meaningful as the customer’s individual profile is factored into the equation along with their remaining time as a customer. Backed by this knowledge, CLV managers can make more effective decisions. However, this model requires more comprehensive advanced analytics capabilities, such as customer identification across multiple channels. For a 360-degree view, it is worth having complete historical customer data as well as regular updates of sales and cost data.

The operative model goes one step further: it automatically predicts CLVs using machine learning and makes initial recommendations for decisions, amplifying the CLV effect. In addition, predictive accuracy and decision making improve with each update. For the operational teams, this means that rather than elaborating decision recommendations, their primary job is to review and continuously monitor them. Yet, creating such models is a much more complex endeavor that can take months, if not years.

For all three models, continuous updating data and calculations is indispensable. For example, CLV must be adjusted after each customer purchase, but the CAC value must also be increased if, for instance, a marketing campaign is launched for a specific customer group. This is essential so that the data and the associated analytics results can be used for future campaigns.

Targeted investment in high-value customers

The last and most important step is to evaluate the CLV and CAC computations in such a way that the company can derive strategic and operational recommendations for action and decisions from them. It is essential to consistently measure the impact of the respective decisions, for example, the increase in CLV as a result of certain marketing measures.

With regard to the depth of evaluation, a distinction can be made between three levels. At the first level, only the average of all customers is considered, although this can already be very helpful when making decisions about expansion into new markets, channels or brands, for example. As a rule of thumb, expansion is advisable as soon as the estimated CLV exceeds the CAC by a multiple—even if profitability has not yet been reached. In practice, mature digital business models should display CLV-to-CAC ratios ranging between at least 2:1 and up to 8:1 or more. At this level, CLV can also be used as a metric to measure and improve the performance of organizational units such as country branches, or to gain a more customer-focused perspective on the business (rather than a purely sales- and profit-centric view).

The next analytical level focuses on cohorts of customers clustered on the basis of their CLV and CAC values in order to improve operational decisions in particular. Demographic data, such as gender, age, place of residence, but also behavioral data such as purchase frequency, brand loyalty, and returns are typically taken into account.

These data sets help marketing and sales teams identify indicators of high CLV and low CAC respectively, and tailor marketing campaigns to individual cohorts. Exhibit 2 illustrates an example of such a cohort analysis: in addition to the distribution of customers among the various CLV levels, it shows the characteristics of less lucrative and particularly valuable customers, as well as the recommended actions that can be derived from them.

Finally, at the third level with maximum analytical depth, the model targets individual customers. However, this only makes sense if the company is operating advanced, automated marketing platforms. Otherwise, individual marketing efforts would be prohibitively expensive and the cost of acquiring and retaining customers would skyrocket.

In a nutshell, CLV offers both established and new players in the e-commerce space the opportunity to better understand, target, and serve their customers in order to engage them in an effective and efficient manner, and create value for them. However, the operationalization of CLV and CAC can also set in motion entirely new developments. For example, successful e-commerce companies are moving to build a network of physical stores to operate in tandem with their online business. Take, for instance, Mr. Spex, Europe’s largest online eyewear retailer, which is opening more and more stores in German cities to attract new customers and create an omnichannel experience. A response to the rising cost of customer acquisition and retention in the online channel in recent years, this trend capitalizes on the fact that it is often cheaper and more efficient to strike the desired CLV-to-CAC ratio in conjunction with offline channels.

Max Ackermann is an associate partner in McKinsey’s Berlin office; Karel Dörner is a senior partner in the Munich office, where Dr. Philipp Kluge is an associate partner; Marcus Keutel is a partner in the Cologne Office; and Fabian Frick is a project manager in the Frankfurt office.

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