What is Customer Lifecycle Marketing?
The Customer Lifecycle describes key milestones that every customer goes through over the course of the relationship with a brand. Customers sign up, they make their first purchase. Some turn into repeat buyers and eventually—sad as it may be to see—some customers eventually stop purchasing altogether.
The goal of Lifecycle Marketing is to tailor marketing communication based on the lifecycle stage of the customer at every touchpoint. By strategizing around lifecycle stages, you make marketing communications more relevant...thus more enticing...thus more profitable.
Customer Lifecycle Marketing Stages
The Awareness Stage is when you first land on someone’s radar. The could be through social media, affiliate marketing, display ads, passing your physical store on the street, billboards. Whatever it is, this is the content that gets their attention.
The Consideration Stage is when someone starts browsing, maybe even adding things to their cart, or at the very least following your brand on social or signing for your newsletter. The content that’s most valuable at this stage is a great series of welcome emails, product descriptions, blog posts, and—probably most importantly—ratings and reviews.
The Conversion Stage is that moment when they’ve been eyeing your brand for long enough that they’re primed to make a purchase. Now you need to help them over the finish line with content like cart abandonment campaigns, product recommendations, and maybe even a timely, limited-time-only discount.
The Retention Stage is your loyalty-building phase, and it’s your most potent lever for your bottom line: for every 1% increase in order frequency, there was a resulting 2.8 point increase in revenue.
Your focus here is converting one-time buyers to two- or three-time buyers and cultivating a loyal fanbase with high order frequencies and/or basket size. Loyalty programs, personalized campaigns, VIP shopping events, and early access shopping are great for this stage.
Cooling & Churned
The Cooling Phase describes customers whose order frequency or basket size has shown signs of slowing. This looks different for every customer. Churned is the phase when a customer appears to have left buying from your brand entirely. The tactics employed for both are pretty much the same, but you’re much more likely to be successful in your re-activating attempts if you can spot a Cooling customer than if you try to wake up someone who hasn’t thought about you in a year or more.
“We Miss You!”-style emails and targeted ads are typical content tactics for this phase, but if these cooling coolers are among your higher-value customers, it’s worth picking up the phone or at least penning a handwritten note.
The R.I.C.H. Checklist
Now that you know the stages and types of content that are most helpful in pushing the needle for customers (or would-be customers), let’s talk about the checklist that will help each piece of content as effective as possible.
Customer Lifecycle Marketing is all about tailoring your marketing communication to the individual customer and where he or she is in their purchase journey. This ensures marketing touchpoints that are communicated at the right time, to the right person, using the right content. This could take the form of product recommendations, content related to a customer’s browse history, or a personal note to say we miss you.
As opposed to “batch & blast” email campaigns, lifecycle-based marketing emails contain content that is tailored to the individual customer, or customer segment, and is, therefore, more relevant and engaging.
Lifecycle marketing is based on insights pertinent to the individual customer (or customer segment): What they buy, their site behavior, the purchase frequency and so on. These insights then shape marketing decisions such as creative, timing, and offerings and allow for a personalized and relevant customer experience—one that is driven by customer behavior.
A calendar-driven marketing program typically does not take into account customer behavior but rather sends out communications based on external events such as holidays, seasonal changes, store sales, and so on. It misses out on the opportunity to incorporate customer data into marketing communication, thus making it less personal.
Many businesses aspire to be “Customer-Focused,” “Customer-Centric,” or “Customer-Driven.” Employing a customer lifecycle marketing strategy puts your money where your mouth is. Your marketing goals become aligned with your overall business vision. Instead of optimizing short-term metrics like campaign revenue or marketing channel conversion, you can focus on improving metrics like customer lifetime value, customer loyalty, and retention.
This could mean that your retention and re-activation strategies are much more aggressive for customers with a high predicted lifetime value. Or it could mean that you have the automatic triggers in place to call out behavioral anomalies that signal a possible lapsing customer.
By focusing on customer value vs. marketing campaign or channel performance, your business favors long-term revenue and profitability vs. short term revenue gains that sometimes come at the expense of customer experience. This is a healthier, more sustainable approach for creating long-lasting businesses.
In addition, customer-focused marketing provides visibility into the health of your customer base: How many customers have not purchased yet? What is the size of the “lapsed” customer segment? How many loyal customers do you have?
Knowing the overall health of your customer base, and making sure it stays healthy, is more valuable than knowing that a certain marketing channel performs well or that a certain marketing campaign brought in more revenue than last year.
To learn more about putting the customer at the center of your lifecycle marketing, check out our webinar, How Customer-Centric Reporting Is Transforming the C-Suite, hosted by Custora CEO Corey Pierson. And in the meantime, get R.I.C.H. and make it rain.