Customer Lifecycle Stages: The Same, But Different

Getting in tune with the customer lifecycle helps both sales and marketing teams deliver the right messages at the right times. Like life itself, a customer makes their way through progressive stages of knowledge – but in this case, it’s about your product, not the meaning of the universe (so it should be a lot easier to guide them through it). And if you play it right, they’ll remain your customer forever.

What is the customer lifecycle?

The customer lifecycle consists of all the levels of someone’s product knowledge and usage as they learn more about your product and eventually buy it. Keep in mind that this definition refers to the customer, because the lifecycle approach is all about giving them information when they want it. This is opposed to other sales strategies, where you nudge someone towards a purchase by, for example, cold calling. (Note: even though it’s called a customer lifecycle, this method also addresses prospects that can potentially become customers.)

But the story doesn’t end there. You want them to keep on being a customer, and this means different things to different types of companies. For example, if your organization sells SaaS, the stages of the customer lifecycle include a constant effort to encourage renewals. This requires an intensive effort to make sure that the client continues to use the software.

Before we dive into the 5 customer lifecycle stages…

Five stages? Now, where have you heard that before? Oh right, as part of the sales funnel. There are a lot of interchangeable terms that describe both the customer lifecycle and the sales funnel, but much of the time they are the same (just to keep things confusing). We’ll get to those soon, but first – what exactly is the difference between sales funnel and customer lifecycle marketing?

In a nutshell, the answer is “direction”. A sales funnel assumes that a prospect goes from one stage to the next within the funnel, so sales and marketing approaches focus on encouraging that progress. On the other hand, a lifecycle model is based on the idea that a prospect might:

• Skip a stage
• Lose interest for a while and then return
• Buy a competing product but still remain aware of your brand (which you can leverage)

In other words, customer lifecycle marketing is non-linear. And because customers might travel different ways to reach the same destination, you’ve got to be ready with additional tools that are meant to nurture relationships (instead of focusing on qualifying and pitching).

…And now, the 5 customer lifecycle stages

For every stage of the customer lifecycle, there are many actions that sales and marketing can take to give the prospect the information they are looking for. Classics like an optimized website or interesting content are basically a given for any strategy. But below, let’s have a look at the touch points that are particularly suited for enhancing the personalized connections that are a priority for customer lifecycle marketing.

1. Awareness – letting prospects get to know essential things about you

• Social media posts that encourage comments and connections
• Research reports that cater to specific segments of your target customers

2. Engagement – the first contact with a prospect

• Lead magnets that provide information in exchange for contact data
• Conversational marketing techniques such as bots and live chat

3. Intent – providing an engaged prospect with “fill in the gap” information

• Free trials
• Case studies
• Webinars

4. Conversion – final details and closing the deal

• Price quotes
• Customer referrals
• Sales calls

5. Retention – keeping them on board

• Loyalty programs and gifts
• Feedback forms and follow-up calls
• Dedicated customer service

Customer lifecycle management

This is all just to give you a taste of how crucial it is for the sales and marketing teams to work together closely, a.k.a., managing the customer lifecycle. Where are some smart places to begin? Here are the best practices:

Build an ideal customer profile 

Who wants to buy your product? What are their pain points? These vital questions should be answered by researching prospects and creating an ideal customer profile.

Map the customer journey

The information you learn during the profiling stage lets you know where potential clients do their shopping, and what they are looking for. The process translates this into a visual scheme you can reference when designing all the points of interaction between a prospect and your brand. When using a customer lifecycle method, pay special attention to the personalized touch points where you can connect with prospects directly.

Set metrics 

The first part of defining metrics is deciding what to measure in order to assess the effectiveness of your activities at any stage. The next part is to figure out your target numbers. For instance, what’s a good rate of moving from engagement to intent, or what’s your churn rate goal after half a year? Through these processes, you will optimize the customer journey and make the entire lifecycle more profitable.

Be ready for engagement

At some point, the prospect will hopefully display an intent signal that shows that they have become a warm lead. This means it’s time for direct contact from the sales team. The customer lifecycle manager will judge which exact behavior qualifies for a proactive step. But the sales team needs to be ready with appropriate messaging and collateral when this happens.

Establish great post-sales service

After all those steps, it’s now time to concentrate on keeping the customer happy. Retention metrics come into play here, as does close supervision to make sure that customer service teams are on top of their game.

What are the benefits of using customer lifecycles?

Companies with a customer lifecycle approach understand that the battle (and the revenue) is only half over when a deal is closed. In addition to making efforts to convert prospects, these organizations also invest in post-sale activities that boost the bottom line. For example:

Expense reduction

It costs about six times more to acquire new customers than to retain existing ones. Once a client signs on the dotted line, the need to expend resources on the account declines significantly. A major reason for this is because the entire sales and marketing process costs money, but still results in various “non-wins” that don’t pay off. Once you’ve got a solid client, the flow of money goes the other way as you’re now bringing in revenue.

Retention improvement

An essential aspect of customer lifecycle marketing is client support. The close connections that are built during the initial lifecycle stages should now turn into a continuous relationship that is supported by, for example, an account manager. The satisfaction increase that results from good support is critical, as 80% of customers have switched brands after a bad experience. In addition, clients that are happy with your product and service tend to become brand ambassadors. They might tell their industry peers to consider your solution, which can lead to word-of-mouth sales–a factor in 65% of new business opportunities.

Income increase 

Good account management and reduced expenses mean more revenue at less cost, and that’s a boost to the bottom line. Over time, the effect of this dynamic also optimizes important sales metrics, especially customer lifetime value.

Key takeaways

• Customer lifecycle sales and marketing focuses on delivering information when the time is right for the client, and an excellent customer experience once the deal is done.
• During the 5 lifecycle stages, the emphasis should be on activities that connect directly with a prospect and deliver a personalized approach.
• By following a customer lifecycle strategy, companies enjoy greater profitability, better retention, and increased word-of-mouth sales.