Customer lifecycle management is the process of tracking and analysing each step customers take as they consider, buy and use a product or service.
To remain competitive in the modern business world, organisations need to be able to do more than just attract new customers. A one-time purchase isn’t enough; companies in all industries depend on loyal, returning buyers to grow their business. By nurturing solid customer relationships built on mutual trust and respect, these companies can improve customer loyalty and customer retention rates, increasing the lifetime value of those buyers who have already made it through the sales pipeline.
Unfortunately, cementing a strong customer-relationship foundation is often easier said than done. To ensure that buyers are having the kind of positive customer experiences that will encourage them to return again and again, successful businesses rely on customer lifecycle management.
Customer lifecycle management aligns directly with the customer lifecycle, in other words, the steps a customer goes through before, during and after making a purchase. These steps incorporate the entirety of the customer journey, from initial contact, to finalised purchase and (ideally) to future recurring purchases.
Because organisations want their buyers to develop the kind of brand loyalty that leads to increased returns, the customer lifecycle is represented as an ongoing rotation rather than a simple pipeline with a definite end point. Customers may continually reenter the cycle at earlier stages as they move towards further purchases. Additionally, it’s worth recognising that each individual customer may experience a unique journey, with their personal customer lifecycles varying to meet their needs and preferences. That said, the basic customer lifecycle can generally be broken into five distinct stages:
At the earliest stage in the customer lifecycle, the customer begins researching potential solutions to meet their needs. As they do so, they become aware of the business or product in question. At this step, it’s important that the business has the correct marketing materials and information in place to help guide the customer towards making a decision. If managed successfully, the customer will reach out to the business, entering the next stage of the lifecycle.
As soon as the customer makes contact, via telephone, email, in-person or most commonly by landing on the business’ website, they enter the acquisition stage. Regardless of the channel the customer uses, correct lifecycle management at this stage depends upon how effective the business is at addressing questions and concerns, providing informative resources and giving the buyer what they need to make a decision. It may also be appropriate for the business to request customer contact information at this point so that they can reach out with personalised communications or offers; online resources can help accomplish this through gated content.
If the customer has been properly nurtured up to this point, they will next enter the conversion stage by finalising their purchase. But even though the prospect is committed to buy, it is still important that the business provides a positive experience. The purchase process needs to be clear, include as few steps as possible and provide enough payment options so that the customer does not back out mid-transaction. By continuing to provide real value, the business helps ensure that the purchase isn’t the end of the relationship.
Retention begins as soon as the purchase is complete. This stage is where the customer lifecycle truly becomes a cycle; customers are looped back into the process to provide feedback, generate referrals, receive perks and special offers and help optimise the customer experience for future purchases. This all ties into reaching out and making contact with the customer post-purchase. Sending out customer surveys and measuring customer satisfaction scores are good places to start.
Finally ‑ though not actually finally, because the customer will continue to make purchases ‑ is the advocacy stage. Here, the customer becomes a brand advocate, promoting the product, service and company to others within their social circles. Establishing brand loyalty is the primary objective of customer lifecycle management, allowing satisfied buyers to become marketing assets in addition to continuing to bring in their own ongoing business. Brand loyalty is a natural byproduct of effective lifecycle management throughout every previous stage.
It’s no secret that good customer experiences drive business growth. Unfortunately, without a proper customer lifecycle management strategy, those positive experiences may as well be random occurrences. Customer lifecycle management allows businesses to put every step of the customer journey under a microscope, identifying and remediating potential stumbling blocks, providing timely support and encouragement and building an effective process that can be replicated for future interactions.
One important consideration, however, is that the customer lifecycle must be managed as a whole rather than broken down into silos. Otherwise, the natural inclination in many businesses will be to focus most of their efforts on the first three stages and then neglect the customers after they’ve made their purchases. Taking a holistic approach to customer lifecycle management not only helps ensure the presence of new customers but also reduces customer churn and improves total customer lifetime value.
Because customer lifecycle management is so heavily involved in tracking and improving the interactions between a business and its customers, it is sometimes confused with customer relationship management (CRM). But although there may be some overlap between the two technologies, they are not the same thing.
The major difference is that CRM is primarily focused on capturing, storing and retrieving information about customers and their interactions. Conversely, customer lifecycle management is more of an analytical tool for measuring business processes as they directly relate to current and prospective buyers. This analytical data may then be applied to improving the customer experience.
In other words, CRM emphasises monitoring and managing relationships and is primarily designed to generate sales. Customer lifecycle management places the focus on how the business supports the customer experience at individual stages in the customer lifecycle. This allows businesses to discover opportunities for improving the entire customer journey from the ground up.
Understanding the stages involved in the customer lifecycle is essential, but it’s only the beginning. To help ensure that buyers are getting the support and guidance they need at every step, organisations must employ effective customer lifecycle management strategies. Here, we identify several best practices that successful organisations use to optimise their customer lifecycle:
Before a business can help potential buyers become more aware of a product or service, they first need to know who those buyers are. This requires market research, competitor analysis and a close look at the business’ current customer base, with the end goal of better understanding the ideal customers for the product or service. Building customer personas may be a useful step, allowing the organisation to determine how best to approach these hypothetical customers and what pain points may need to be overcome.
A key aspect of the awareness stage is education. Many potential customers begin their journey not with the intent to make a purchase, but by simply looking for a solution to a problem. As such, resources such as blog articles, social media posts, infographics, whitepapers and online courses may all help generate buyer interest and establish the business as an authority. Organisations can further improve their resources by tracking interactions and identifying the materials that are most effective in terms of visits, average time on page and the percentage of users that click on hyperlinks to other related pages.
Customers who progress into the acquisition stage will often require additional service to continue moving forward. But not every customer who has a concern or experiences an issue will reach out for help; some will simply leave. Therefore, it becomes the responsibility of the organisation to reach out to customers to provide customer service. Proactive customer service techniques include asking for feedback, engaging customers as they visit the site, offering discounts or product recommendations and following up on abandoned shopping baskets.
While enthusiastic service representatives are certainly important, many customers would rather not have to interact with a live agent for their concerns to be addressed. FAQ pages and knowledge databases can be effective tools for encouraging ongoing interactions and helping promote the idea that the business is a knowledgeable and reliable source of information.
Online purchasing processes can get bogged down with unnecessary forms, surprise costs, forced account creation, perceived security issues, performance errors and a lack of payment and shipping options. On the other hand, businesses that streamline their eCommerce checkout without restricting buyer options see improved checkout completion rates and a larger percentage of return customers. Create an intuitive ordering system and track its use to determine where buyers may be experiencing friction and then revise the process accordingly.
Ensure that every buyer knows that they are valued and that their voices are being heard, by following up with them during the retention stage. Sending a short ‘thank you’ message, soliciting feedback through a survey, sharing special offers or even just asking if they are happy with their purchase and their buying experience can go a long way towards inspiring future purchases. It will also provide essential insight into the conversion process, i.e. what’s working and what may need to be revised.
Customer lifecycle management exists to help businesses grow. But what happens when the business grows beyond its ability to effectively manage the customer lifecycle? Automation allows customer lifecycle management to scale along with the business, ensuring that important touchpoints happen at the correct stages of the lifecycle. Notifications, emails, survey requests and many aspects of service and support can all be automated, freeing up human representatives to focus on more strategic concerns.
The advocacy stage is where businesses make customer loyalty a reality. As mentioned above, the success of this stage depends heavily on the stages that precede it, but companies can help promote a positive, continuous relationship by inviting their customers to leave reviews about their experiences. At the same time, happy buyers may be solicited to refer others. Using discounts and special offers to reward those who are willing to provide referrals and leave reviews (positive or otherwise) can be a powerful way to inspire ongoing interaction while also supporting continuous improvement of the pre- and post-purchase process.
With so many purchasing options available and new competitors always entering the market, the value of returning customers cannot be understated. Customer loyalty has become a differentiating factor across nearly every industry. Customer lifecycle management offers strategies for guiding and retaining buyers, helping ensure that their first purchase isn’t also their last. But to effectively manage a customer base at scale, you need the right tools. Customer Service Management (CSM) from ServiceNow is the answer.
Built on the industry-leading Now Platform®, CSM goes beyond traditional customer relationship management, providing advanced tools and automation capabilities to empower your organisation with a more solid connection to the people who keep you in business. Optimise and expand your self-service capabilities, automate a range of processes and monitor and support interactions at every stage of the customer lifecycle. With Customer Service Management, you have what you need to deliver loyalty-inspiring experiences at the push of a button.
Learn more about Customer Service Management from ServiceNow and turn your customers into true brand advocates.
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