A Guide to the Customer Lifecycle: Definition & Stages

How great would it be if we could just get customers to purchase our product once, and then they would stay with us forever?

What a dream, huh?

customer lifecycle

Sadly, customers are no items to collect. They are bound to change, just like our products. And if you think focusing on purchases and overlooking other aspects of a customer’s experience with you won’t be a problem, you are absolutely wrong.

Now, to fix this issue, there is but one way. And that is understanding your customers’ lifecycles.

So if you are thinking, “but how?”, do not fret.

In this article, we’ll dive into the customer life cycle, what each stage means, and how businesses can increase their conversion rates by targeting customers at specific points in this cycle.

So, what is a customer lifecycle?

Customer lifecycle refers to the stages that a customer goes through regarding product discovery, purchase, and loyalty to the brand. These stages may vary for different brands and companies, but a regular customer lifecycle encompasses:

  • Customers getting aware of a particular product or service, looking for one
  • Customers deciding which product to use and their post-purchase behavior
  • Retaining customers successfully and getting them to promote the product

Customer lifecycle marketing is a strategy that involves examining the entire customer journey on a holistic level, starting from the first point of contact, nurturing the leads across the buying cycle, and then working on deepening the post-purchase relationship to ensure long-term loyalty and repeated purchases.

Understanding the customer lifecycle is key for marketing success because it can help marketers create a personalized strategy that engages customers at every step of their journey. 

This always-on approach means tailoring messaging to each touchpoint in the process.

Understanding how people move through the funnel with varying levels of engagement requires an understanding of the customer lifecycle – which you’ll find detailed below.

What is the difference between the customer lifecycle and the customer journey?

“What’s the difference between a consumer lifecycle and a customer journey? Aren’t they both related to how a customer communicates with your business and connects with it?” might be what you are thinking. 

Well, yes and no

The customer journey takes into account the client’s perspective. It begins with awareness and ends with any post-purchase communications. For example, an evaluation request for the products in your store can be a part of the customer journey.

The customer lifecycle, on the other hand, refers to how a business interacts with customers throughout their relationship. This concept applies to how the company handles the whole customer experience – including actions way after the purchase.

Although they are both marketing terms, the customer lifecycle did not exist until the first CRM system was created. This type of software aims to collect both customer and company experiences and determine how we interpret both concepts.

What is Customer Lifecycle Management?

It is undeniable that customers who have a good relationship with you are more likely to stick around longer. I, for one, will never put up with a lousy product or customer service, even if it is free.

That’s why a successful customer lifecycle management (CLM) process is among a company’s most valuable assets.

But what exactly does CLM mean?

customer lifecycle management

The customer lifecycle management process entails handling various phases of the customer journey, from onboarding to renewal.

Such a process allows you to focus on the particulars of each step. That includes finding KPIs and metrics for performance and identifying what your current customer base is looking for at every segment to better relate with them.

stages of customer lifecycle

What are the 5 main stages of the customer lifecycle?

Now that you know what customer lifecycle management is, you should be aware of one thing: this process does not have a one-size-fits-all solution.

Your business processes and what the company does for the customers must be considered when managing the customer lifecycle.

A successful CLM is related to your business’s actions, including the sale and what happens after. 

Customer lifecycle management involves what happens in between that time – how you are able to provide support for the customers who have already bought from you, maintain relationships with them through marketing campaigns and community outreach efforts to make sure one thing.

That they come back.

Customers are not always loyal to your product. Factors like abandonment, attrition, and churn play a role in determining why they give up on it. 

All of these factors should be considered when designing an effective CLM strategy because understanding them will help you understand what is going wrong with your business.

Although each company’s customer lifecycle management is different, you should be aware of some common stages in the process, regardless of your industry.

These stages are

  1. Brand awareness,
  2. Acquisition,
  3. Conversion,
  4. Retention,
  5. and loyalty. 

Let’s take a closer look at each of these stages.

1- Awareness

This is the point at which the consumer becomes aware of your company for the first time.

The awareness stage can be initiated by an internet search, seeing your advertisement, reading a review or coverage on a blog or in a magazine, or word-of-mouth recommendations.

Capturing a customer’s attention in a world where attention spans are short and markets are highly saturated can be a big challenge for businesses. To catch their attention, you must be in the right place at the right time with the right message.

You must also answer the right questions which are:

  • What is your product or service?
  • What problem do you solve and what are your solutions?
  • Whose problem are you solving?

2- Consideration

Being aware of the company and what it offers transforms into a more critical analysis for the consumer at the consideration stage.

They’re beginning to evaluate your value and compare it with your competitors. They’ll also be evaluating how well your products and services meet their needs and how well they will fit into their lives.

They could go back to some of the information sources they used during the awareness stage, re-evaluate them in greater detail, and bring in new ones. Product pages and specifications, reviews and ratings, anecdotal stories, and customer testimonials can all help.

The questions you should answer at this stage are:

  • What are your product’s specific features?
  • What sets your product apart from other products?
  • What extra can you offer to stand out from other products?

3- Conversion

Having gained all the necessary information and feeling delighted by your brand’s customer experience, the prospect makes a purchase. They’ve officially converted into one of your customers!

At this stage, you want to make it clear that you’re providing value. Not only have your customers made a purchase, but they’ve also started a valuable relationship with you.

For a lot of businesses, conversion is the end goal. But for SaaS businesses, this is where the real challenges of the customer lifecycle start.

Once you’ve got customers to your brand, it’s time to develop new strategies to retain them for them to keep coming back over and over again.

Remember to provide answers to these questions at this stage:

  • How can you make the most out of customer onboarding?
  • How can you make sure to retain the customer until the next purchase?
  • What other products and features you can offer to make user experience better?

4- Retention

Retention is a company’s ability to maintain its customers’ satisfaction and turn them into loyal customers.

Once the first purchase has been made, your efforts shift towards the ongoing relationship between you and the customer, which will hopefully last for a long time.

This phase requires creative thinking when it comes to marketing strategies such as promotions relevant to their interests, loyalty programs that keep customers coming back again and again, and clients’ feedback so that you know what they like or don’t like.

And remember: Providing excellent service and personalized support to your new customer is the key to maximizing retention.

Ask these questions to yourself and your team:

  • How can you make the customer’s user experience even better?
  • How can you make sure they are getting the most out of your product?
  • How can you get the customer to be a brand advocate?

5- Loyalty

A repeat customer has formed a strong positive bond with your brand at this stage and is enthusiastically recommending it to others.

He/she is now a loyal customer

A loyal customer can also be referred to as a “brand advocate.”

It takes time and effort to get to this stage, and brand advocates will make up a small percentage of your total customer base. To keep them at this stage, make sure to treat them well and recognize their contributions.

This stage of the customer lifecycle might be the last stage and can’t become a “cycle” if you don’t have answers for these questions:

  • What is the best way of getting brand advocates to market for you?
  • Are you providing your loyal customers with special offers and sales?
  • Are you keeping track of customer health scores to see if the customers are still loyal?

How do you effectively manage a customer lifecycle?

Now that you’ve defined all of the steps that make up the customer lifecycle, it’s time to manage it.

Here are three tips to help you get started.

1- Understand your consumer with data

For marketers, data is essential, and data-driven strategies outperform those based on unproven assumptions.

So, if you want to improve customer engagement through customer lifecycle management, you should familiarize yourself with spreadsheets.

Each of your customers may have different needs at different times in their lifecycle, and satisfying those needs keeps them close, interested, and buying.

Therefore, to better serve the customers’ needs, you must look at the data.

2- Define KPIs for each customer lifecycle stage

KPIs (Key Performance Indicators) are a great way to see if the business is on track to meet its goals.

Since each stage of the lifecycle has its own set of characteristics, you should identify KPIs to monitor them and ensure that your team’s efforts are on track.

For example, check to see if your SaaS clients are using the tool they purchased. It can assist you in determining their level of engagement.

3- Share your data

Even though the marketing department is most interested in the customer lifecycle data, all the employees should have access to it. 

So, it is a top priority to ensure that the data is easily understandable and accessible to other departments within your organization.

For example, CRM software is a perfect way to share actionable data with your team to ensure that the customer lifecycle is well-documented.

why is a customer lifecycle important

What are the benefits of customer lifecycle management for companies?

Now that you have a good understanding of CLM, let’s take a look at some of its benefits.

1- Customer Lifecycle is a business strategy

Customer lifecycle management is more than just a marketing strategy; it can also help businesses create value for customers.

It’s all about giving your customers a great experience that encourages them to connect with your brand more.

2- CLM is a competitive advantage

Companies that use customer lifecycle management have a better chance of succeeding than those that don’t.

The reason for this is simple: they can quickly create more robust pipelines and generate recurring revenue.

All of the data you’ll need to analyze during the customer lifecycle will help you create awareness so you can spot opportunities, reduce costs, and promote products.

3- Customer lifecycle management can simplify your operations

Imagine how easier your life would be if your company’s processes and products didn’t overlap. Customers also have a bad experience as a result of such problems.

CLM will help you centralize client information in one place, and marketing, logistics, and sales divisions would have easier access to and control of data.

Conclusion

Understanding the stages of the consumer lifecycle and how the prospects think at each stage can help you develop more effective marketing strategies. It will also help you increase conversion rates, develop long-term relationships with your existing customers, and gain new ones. 


Frequently Asked Questions


How do you keep a customer for their entire lifecycle?

The way to a healthy customer lifecycle is perfect customer service. Beyond all product features, customers prefer the companies with the best customer service and it is for a reason. You can find similar features elsewhere but a good customer service is one of a kind.


What is Customer Lifecycle Management?

Customer Lifecycle Management or CLM is a collection of KPIs and metrics that shows the performance of a business in acquiring and retaining customers when calculated correctly.


How does CRM work along Customer Lifecycle?

A CRM, or Customer Relationship Manager software is the greatest tool to accompany customer lifecycle. By using such a tool, companies can see where each customer is on the customer lifecycle and take reasoned decisions accordingly.

Suzan Çalcalı

Suzan is the Customer Success Manager of UserGuiding, a code-free product walkthrough software that 2000+ companies trust in their user onboarding.

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