What is the customer lifecycle?

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5 steps to the customer lifecycle

As I have had the opportunity to go into many organizations, the one thing that was common is that the majority of people were not aware of the customer lifecycle.  They were quite focused on their specific vertical and the scorecard that was driving their performance to really take the time to look at the holistic view of the customer lifecycle.

We should start off by defining the customer lifecycle.  It is essentially the different steps, or moments of truth that I like to call them, that your customer passes through from point of thinking about buying your product or service, to purchasing, to after the sale.  Optimally managing these steps are critical to your organization’s growth.  Specially since repeat customers drive at least 4x more revenue than one time customers.  This is why managing the relationship is critical in today’s competitive market.

The steps that a customer goes through can vary from organization to organization but the key is managing customer expectations from the time your product comes into the customer’s radar to after they have completed the purchase.  Being fully vested and knowledgeable on the customer lifecycle will ensure that you are optimizing the revenue opportunities from existing and potential new customers.

I’m going to discuss the main steps but of course you could sub-divide each step based on the area of focus for your specific needs and direction.

The 5 Steps in customer lifecycle:

  1. Reach – Your effective marketing will put your product or service in your potential customer’s mind as consideration amongst many others vying for their attention.  How compelling your marketing message is will dictate whether they move to the next step.  Marketing in the space that your potential customers will see you message is important to make sure that you are able to reach them.
  2. Education – This is the step where you try to convert those potential customer’s thoughts about your product into action.  This where data about your potential customer will come in handy to formulate a personalized strategy through the customer’s medium of choice.  They will come to your medium with a need in mind.  Now you have to be able to show them how your product or service will help them fulfill that need.  This is your opportunity to start to differentiate yourself from the competition by enabling the customer to find what she’s looking for with minimal effort.
  3. Purchase – They have now purchased your product or service.  Now is your perfect opportunity to develop a relationship based on the memorable service your give them and then use data analytics from information that you gather about them to proactively offer them other services that they may like.  Your goal is to turn one-time buyers into loyal repeat customers.  So don’t just focus on that one time sale but in providing value and building that relationship.
  4. Retention – This is where you make the customer feel valued, respond to their requests in a timely manner, resolve all their issues and just continue to solidify that relationship.  Make sure you legitimately take their feedback from all channels and use it to improve your products or services.  You should also look at surveying your customer at this stage to make sure that they are happy.  Some companies are afraid to get this feedback because they might not like what they hear.  It is way more profitable to sell to existing customers than to always focus on acquiring new ones.  Remember customer churn is very expensive!
  5. Loyalty – at this stage you want these customer to become your brand advocates.  Think Apple.  If you have managed your customer moments of truth then I’m confident that they won’t have any issue recommending your product or service.  Imagine the impact this would have specially with the rise of social media. Would be great to get these positive reviews go viral with no additional marketing cost.  All because you managed the relationship to your customer’s expectation.

The customer lifecycle is not a one and done deal.  It goes in a circle so you need to continue to re-invent yourself to ensure that you are always staying ahead of your competition.  If you are on top, believe me your competition will be watching and replicating.  The only way to stay ahead is to continue to listen to your customers and re-invent yourself.

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