A Beginner's Guide to the Customer Life Cycle
A Beginner’s Guide to the Customer Life Cycle
Overview: What is the Customer Lifecycle?
The customer life cycle defines the various stages a consumer passes through on the path to becoming a loyal customer. It involves the touchpoints a consumer will have with your company from the first time they hear about you through to an ongoing relationship with your business.
Your efforts to nurture clients through these stages allow you to grow the Customer Lifetime Value, and so, it’s useful to document these stages in a User Journey Map, a visual representation of the consumer’s touchpoints with your company.
Stages of the customer life cycle
1. Awareness
This is the point where a consumer first becomes aware of your business offerings.
It can also be the most expensive for your business from a cost per acquisition perspective
Maximizing awareness:
- Collect data: When you’re building an acquisition strategy for the first time, you don’t know which tactics will ultimately work best to raise awareness and bring customers into your sales funnel.
- Use different tactics: Try a variety of methods to acquire customers.
2. Consideration
In the consideration stage, the consumer has discovered your business and is now collecting information to weigh the pros and cons of your offerings. Sometimes, this assessment is against your competition.
Maximizing consideration:
- Leverage a CRM
- Provide access to information
- Offer a carrot
3. Purchase
They’ve evaluated your offerings and decided to buy from you.
Maximizing purchases:
- Collect more data: You want to collect data about the kinds of customers who make a purchase so you can find more like them to target during the earlier stages.
- Remove purchase barriers: Adding functionality such as chat to your website can help remove barriers for customers to make a purchase.
- Perform follow up: If you’re an e-commerce business, adopt e-commerce software that automatically follows up with customers who abandoned items in their digital shopping carts to remind them to complete their purchase.
4. Retention
The retention phase is all about deepening the relationship with the customer after the purchase so that they are more likely to buy from you again. This happens by providing follow-ups, reminders, and promotions to customers, usually via email.
Maximizing retention:
- Hand-hold customers
- Provide support
- Personalize communication
- Encourage additional sales
5. Advocacy
The last stage is when a customer becomes so fond of your organization that they become advocates for your brand. They tell friends and colleagues, and recommend your business to others through online reviews.
Maximizing advocacy:
- Implement a loyalty program
- Create a referral program