What Is a Customer Lifecycle? (With Stages and Tips)
By Indeed Editorial Team
Published June 9, 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Establishing a relationship with customers is essential to long-term relationship management. The lifecycle of a customer refers to the way they progress through various stages, moving them from potential lead to full-time customers. Understanding the stages in this lifecycle can help you apply the best strategies to help customers progress through those stages and become loyal return customers. In this article, we explore what a customer lifecycle is, outline the various stages involved in the lifecycle, and provide tips for managing them.
What is a customer lifecycle?
A customer lifecycle refers to the various stages a customer goes through as they consider a product or service before becoming a customer. This cycle identifies the customer's level of interaction with a brand and the necessary attention they require to move further along the sales funnel. The closer they are to becoming loyal customers, influences which type of marketing strategy is ideal for appealing to them. The lifecycle of customers is also an important aspect of cultivating brand loyalty.
Through brand loyalty, the lifecycle of a customer can result in a mutually beneficial relationship that you can leverage with new products and services. This lifecycle can take different forms and is rarely ever in a linear course or progression. Customers can begin their lifecycle at different stages depending on their demographics, activity, and pain points. Identifying what stage a customer is in their lifecycle can help you improve your customer relationship management. For instance, you can decide the best marketing strategy to convert potential customers to loyal customers and realize long-term benefits.
5 stages in a customer lifecycle
Here are the five main stages in the lifecycle of a customer:
1. Discovery stage
While the typical lifecycle can take peculiar courses, the discovery stage usually comes first in the lifecycle. This stage involves a customer finding a product while searching for a way to resolve their unique pain points. The discovery stage in the lifecycle of a customer can take different forms, including referrals from existing customers or interactions with digital mediums. These can include search engines, advertisements on social media platforms, and SEO articles aligned with their unique keywords.
Most customers remain flexible as they search for the best service provider or product retailer to meet their needs. This flexibility remains while they decide on a specific business. This makes the discovery stage essential in appealing to potential customers, as it's an opportunity to cultivate a relationship with them. You can also use the metrics that lead customers to your business from this stage to measure the effectiveness of your marketing strategies.
2. Education stage
What usually follows the discovery stage is the customer's curiosity to know more about the products and services. You can identify this stage through customers' questions and their interaction with your website, e-mails, and social media platforms. This stage helps you interact with customers' unique needs and pain points. You can also educate them on how your product and services satisfy their needs or resolve their challenges. This stage is an opportunity to show your understanding of your ideal customer and how your services outshine the competition.
You can use various communication platforms to interact with your customers and educate them. These tools include testimonials from other customers, white papers, comparison tools highlighting your competitive advantage, blog posts, and scheduled webinars. This stage is important in improving customers' confidence in your products. You can also help them make informed decisions with the information you provide. They can also determine the value you place on existing customers at this stage.
3. Purchase or subscription stage
This stage in the lifecycle forms the initial reward for proactively interacting with customers and educating them. Customers purchase your product or subscribe to a service package at this stage. You can identify this stage when customers purchase products at the store or make an online order for a shipment. This stage is also essential in providing the best customer experience. The ease of the purchase process or experience informs the likelihood of retaining a customer long-term. It's important to optimize or streamline the buying and subscription process to a few essential steps.
You can apply different methods to optimize the purchase process, making it easy and seamless. For example, if the products and services are largely available online, you can optimize end-user interactions with the website. This involves improving the security of your website for payment information, offering various payment options, and ensuring efficient transactions. These factors contribute to giving customers a memorable purchase experience. You can foster brand loyalty by ensuring this stage in the lifecycle reflects the features and offers from the education stage.
4. Post-purchase engagement stage
The interactions you have with customers after their purchase play a significant role in encouraging them to make repeat purchases. Your interactions can take the form of feedback, further product recommendations, and relationship building through social media. You can also use this opportunity to incorporate feedback into improving products. This shows your commitment to offering your customers the best possible experience.
These interactions also help you identify new pain points and improve your overall marketing strategy. This stage also offers opportunities to apply your customer retention strategies. This helps you make the most of your existing clientele and foster brand loyalty by offering them new products and diverse services. Customer engagement also helps you optimize your marketing strategies by recognizing niches and demographics similar to your existing customer base.
5. Advocacy stage
One of the most effective ways to grow your reach is through customers who speak of the benefits of your products and services through word of mouth. This can take the form of good reviews on product platforms, social media posts, and other visible endorsements. This stage in the lifecycle involves converting them from loyal customers to brand advocates. The new customers that find your business through referrals have a higher lifetime value (LTV) and are more likely to purchase the products and subscribe to the services.
By increasing the number of advocates for the brand, you can derive these benefits for the brand. Advocacy also makes the lifecycle of many customers more effective and seamless. You can cultivate this process with your products by offering special benefits to promising customers from the post-purchase engagement stage. These benefits help you connect with customers and distinguish your product and customer service from the competition. Some benefits include competitive prices, special e-mails, birthday messages or discounts, and personalized customer care.
Tips for managing the customer lifecycle
Here are some tips and strategies you can consider to improve the efficiency of managing this lifecycle:
Identify your target audience
Identifying your target market is a vital step in improving the efficiency of lifecycle management. Measuring progress and improving your methods can be demanding without first identifying the niche you're offering your services to and the demographics of your ideal customer. Identifying your target audience helps you determine your customer's pain points, the information they find relevant, and the most effective ways to reach them. You can also develop buyer personas with the demographics, needs, and purchasing behaviour of members of your target audience.
Provide relevant content
After identifying who forms your target audience, you can determine the kind of information and content they find relevant. With relevant information, you can improve the reach and engagement of a product by ensuring that your message resonates with your ideal customers. You can disseminate your content through various mediums, including infographics, online courses, and on social media. The nature of your content can improve your credibility with customers and encourage them to proceed to the education stage of their lifecycle.
Automate as many processes as possible
It's understandable that you cannot attend to every aspect of customer interactions. This makes it important to apply measures that promptly respond to customer inquiries and needs. For instance, you can use chatbots, social media tools, and e-mail campaign managers to automate processes. You can also use customer relations management (CRM) tools to integrate your contacts or customer list into the publication of your content to give it a personalized feel.
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