A good customer service professional knows that business is about more than just closing a single deal. The best companies strive to create relationships with customers that are beneficial for both parties involved. This usually results in a higher customer lifetime value, meaning that the customer is likely to continue doing business with the company for a longer period of time.
They focus on the customer journey from awareness to purchase to retention. Analyzing the customer’s journey will help you to better prepare your marketing, sales, and customer service teams to turn one-time purchasers into lifelong customers.
Does customer lifecycle management (CLM) bring in more revenue?
The customer lifecycle management approach has been popular for many years. The primary goal of customer relationship management tools is to improve customer relationships in order to retain customers and bring in more sales.
In CLM, customer data is used to create customer-specific campaigns that focus on providing the best customer experience possible. This approach is effective in achieving customer satisfaction and providing effective customer service.
What Is Customer Lifecycle?
The customer lifecycle is the journey that a customer takes with a brand, from becoming aware of the product, to making a purchase, and ideally becoming a loyal, lifelong customer. The process consists of five stages: attracting customers, selling to them, persuading them to continue buying, and keeping them as long-term customers.
It is a marketing term used to describe your customers’ behavior and how long they will interact with you. Its purpose is to make sure customers are happy while still increasing sales.
It is important to understand the customer lifecycle concept because this way of thinking about customer management can help you keep customers, increase customer satisfaction, and save money.
This approach to customer service involves improving your offerings based on customer behavior. You would use customer-specific campaigns that are personalized for each new and changing customer segment in order to keep them happy. This is the best way to increase sales opportunities while getting a better bottom line and achieving customer satisfaction.
CLM and CRM tools can provide you with important data for key metrics.
This data on customer behavior can be used to make your brand more reputable, make customers more likely to stay, and make each customer’s experience more pleasant.
Why Is Customer Lifecycle Management Important?
If you manage your customers’ lifecycles effectively, you will have a better chance of successfully selling additional products and services to them.
Also, customer lifecycle management software offers tools to:
- Extend warranties
- Add service agreements
- Make new offers at the end of the product lifecycle
The Possibility of Extending Warranties
Warranties are often offered to customers when they purchase a tech product or other high-end good.
This may protect their new investment for two to 10 years.
The customer is more likely to continue using the product if they feel that they are protected by the warranty.
If their product breaks, they will have to pay for it themselves.
It’s important for businesses to offer warranties and the ability to extend warranties through loyalty or service programs. Having a CLM software can streamline this process.
Adding a Service Agreement
Have you come across service agreements? Service agreements are not attached to any physical product, but they work in a similar way to warranties.
If your customers have a problem with the product they bought, they can rely on the service agreement.
This could cover the cost of a replacement product, so the customer wouldn’t have to pay anything out of pocket.
In other words, if you can convince customers that their investment is safe with your company, they will be much more likely to remain loyal to your company.
Making New Offers as Products Reach the End of Their Lifecycle
The customer lifecycle management process provides the perfect opportunity to make a timed offer.
You can use this information to your advantage when a customer reaches the highest point in your sales funnel.
Now that you have the data, you can make an offer that the customer will probably accept. If a customer loves a product, you should introduce them to a related product.
Customer Lifecycle Stages
There are five stages in the customer lifecycle: reach, acquisition, conversion, retention, and loyalty. The customer lifecycle is what happens to a customer after they make a purchase, as opposed to the buyer’s journey which is the process leading up to the purchase.
We’ll walk through these stages one by one.
A customer becomes aware of an issue or problem they need to solve and then searches for a product. This stage is purposed for “reach” because it’s an opportunity to reach the customer while they’re still trying to make a decision.
The customer is trying to decide between different brands of products, including your own. They are doing research and reading reviews from other customers to make a decision. In order to make your brand known to potential customers, you should use social media marketing, SEO, search engine marketing, and other inbound and outbound methods.
The stage is successful when the customer contacts you for more information, wanting to learn more or get a final price.
The sales and marketing teams here have most of the work, as the customer is just a lead at this point.
The sales and marketing teams goal is to convert leads into customers, but they must first ensure that the leads are worth working with.
The customer has now entered the acquisition stage when they reach your website or call you on the phone.
The look of this stage will differ based on the acquisition channel the customer has used. If you receive a phone call from a customer, you will need to address their questions and concerns. You will also need to ask for more information about what they need. The next step is to identify the customer’s needs and then offer them the best products or services to meet those needs. You should also provide customers with information about how to use the products or services effectively.
The potential customer should find helpful and educational content on your website that will help them make a purchasing decision. Every content offer, pricing page, or blog post should provide the customer with the information they need in order to make a purchase.
Some of the content on this site should require a customer’s information in order to access it. Remember that your customer service team should be available to answer urgent questions through live chat. No matter what somebody is doing on your website, they are technically receiving customer service. This could be something as small as someone trying to figure out how to use your site.
After gaining all the required information and enjoying the customer experience, the prospect makes a purchase. They’ve officially converted and turned into your customer.
At this point, you will want to make it abundantly clear to your audience that you are providing them with value. This means that they don’t just see you as a company that they buy things from, but as a relationship that they are invested in. Your work isn’t done yet. To keep the new customer, you need to keep taking care of them and interacting with them.
The first step in retaining customers is to gauge their satisfaction. You should touch base with them to see how they’re liking the new product or service. Customer surveys are a great way to get feedback on your company’s performance. Voice of the Customer programs can help you establish what customers want and how you can improve.
You can use information from your customers to improve your products, services, and customer service experience.
In this retention stage, you’ll want to offer exclusive perks that your customers can only access. Product discounts and referral bonuses can make a customer more loyal to a brand and more likely to promote it to others. You can keep your customers longer by using upselling and cross-selling techniques, as well as providing continued support.
At this stage, the customer is valuable to the brand because they make more purchases. Individuals might share information about their experience with your company on social media or write reviews that would be helpful for a future customer during the reach stage.
Brand loyalty is of the utmost importance. Here’s a common example.
In the auto industry, many brands sell similar vehicles for the same reasons. What helps a customer choose an SUV between Toyota and Chevrolet?
The answer is brand loyalty. For example, the customer’s first car could have been a Toyota Camry in the 1990s. The car was always dependable for them during and after college. Now that they are an experienced car-buyer looking to invest in a new SUV, which company are they going to go with? Do they want the brand that has been around for the past three decades or the one that is new to them? Most likely the former, unless a negative customer service experience causes them to leave.
This is the final stage of the customer journey, where the customer has been influenced by the previous stages and makes a purchase. This means that you cannot create brand loyalty where it doesn’t exist. You need to nurture and instill your brand in customers through service experiences that solve their problems and prove the value of your product.
The typical stages a customer follows in their journey with a brand are fluid. There are several ways customers can learn about a brand: family or friend recommendations, social media, advertisements, research, and more.
It is important to understand the customer lifecycle so that it can be managed effectively. Mapping out the customer lifecycle can help with this process.
Customer Lifecycle Map
A customer lifecycle map is a high-level, visual tool that marketers use to track the progress of customers through the buyer journey. It’s important to understand the behavior of customers as they go through different stages.
Differentiating—or figuring out which actions in the buyer’s journey match up with each stage—can help you build a buyer journey that moves prospects from knowing about your business to becoming passionate advocates.
We can use the customer lifecycle to help us better understand customer behavior. By understanding the customer lifecycle, we can improve our customer relationships and better target our marketing efforts.
You won’t be able to manage the customer lifecycle unless you carry out a customer lifecycle analysis to show you how your customers are moving through the pipeline.
Conducting a Customer Lifecycle Analysis
It is essential to know how you are doing at every stage of the customer lifecycle in order to use it for your brand’s benefit.
The questions below can help you analyze your current customers’ journey. Bootstrapping your business is hard enough — you shouldn’t have to do it alone. The following questions will help you identify areas in which the customer lifecycle could be improved, as well as possible solutions to improve the customer experience overall.
What is The Difference Between CLM and CRM?
More companies use CRM as it is the standard, while CLM is more analytics-based.
Although the average CRM software provides adequate analytics and reporting, it is possible to obtain more detailed information about the metrics that drive your company’s success through CLM.
Many marketing experts agree that the best way to measure the success of your CRM approach is to look at your CLM metrics. This is another example of the extensive reporting that you can find in lifecycle management software.
The metrics you want to focus on include:
- The cost of customer retention or acquisition: If by implementing your CRM software, you could lower the cost of converting leads to customers or maintaining customers, that’s ideal.
- Response to marketing initiatives: How much attention your audience has paid to your marketing efforts lets you know whether your CRM investment was worth it. Granted, you don’t always see wholesale positive changes right after implementing customer lifecycle in CRM software, so remember to have some patience with this metric.
- Purchasing frequency: Once you link together with your customer lifecycle management and CRM software, you’d hope the purchasing frequency from your customers would increase.
THE PROBLEM: YOUR BUSINESS ISN’T GROWING AS FAST AS IT SHOULD!
Your sales have stagnated or decreased, and you can’t figure out why. Discover what’s holding you back from achieving predictable sales growth in your business.
If you want to grow your business, you need a proven plan and framework. That’s what you get with the 2X Your Sales Discovery Session.
Want to learn about a formula for Predictable Growth that will put your business on a 90-day path to 2X Your Sales?