Are you looking for ways to enhance your business’s performance in terms of customer experience metrics such as customer retention rate, satisfaction and loyalty? If so, consider improving your customer lifecycle management (CLM).
Not sure where to start? Don't worry. In this starter’s guide to customer lifecycle management, we'll cover all the basics you need to know about CLM, including the top strategies and tips for successful implementation.
What does it mean by the customer lifecycle?
The customer lifecycle is the process that a customer goes through when interacting with a company, such as comparing, purchasing, and using the products or services.
Understanding the customer lifecycle is important because by understanding the challenges and opportunities presented at each stage, you can devise more targeted and effective strategies to ensure that customers remain satisfied throughout the entire consumption process and continue doing business with you.
There are 5 stages of the customer lifecycle:
During the awareness stage, the customer becomes aware of your products or services that can satisfy their needs. Since it represents the first opportunity to introduce your products and services to customers, this is usually considered the most important stage of the customer lifecycle. In fact, 77% of consumers purchase an item based on the brand name rather than the product’s name
Marketing and advertising are typically used to build awareness among customers. A successful campaign will capture the attention of your customers and establish a positive brand image. The goal of this stage is to get the customer to contact you for more information, either because they want to know more or because they are ready to get a price.
As the consideration stage begins, customers start collecting information about your product or service, in order to compare it with those offered by your competitors. Typically, this involves a systematic analysis of key aspects that customers care about when choosing a product or service, such as price, features, ease of use, etc. After weighing the pros and cons of different offerings, customers will then make their final decision.
Hence, it is important to provide customers at this stage with the resources they need to make informed decisions. The common communication channels you should focus on are websites, hotlines and live chats. These channels complement each other while websites can only provide limited information, hotlines and live chats can answer any queries customers may have. While hotlines have restricted working hours, automated live chats such as Algomo make sure you can respond to customers’ concerns 24/7.
At this stage, customers have decided to buy a product or service from you. You need to remember that they’ve not just made a purchase, but entered a relationship with your business that requires many efforts to maintain and strengthen. This may sound like a trivial stage but arriving at this stage does not guarantee the purchase. Many factors may hinder customers from completing the final transaction.
For example, if the customers find the purchase involves too many steps, or is too confusing, they may choose to give up. In other circumstances, customers may face difficulties using the payment methods that they prefer which induces them to postpone or cancel the purchase.
Up to 15% of online card payments fail, costing merchants billions in lost sales and administration. (Source: truelayer). To see how your business is doing at this stage, look at your purchase workflow and see how many customers drop off before completing the purchase.
After settling down the transaction, you should immediately start to think about how to make customers buy from you again and hopefully help you attract new customers through word of mouth. This stage is important for sustaining the strong growth of your business.
In this stage, you keep in touch with your customers through channels like emails to promote campaigns, offer discounts, and recommend relevant products and services. Another crucial way to build retention is to provide excellent post-purchase customer service, which is easy to access and offers fast and accurate responses.
The loyalty stage is when the customer becomes a repeat customer and advocates for the company. They may first think about your product or service whenever a relevant need arises. And they would like to recommend your offerings to friends, colleagues and even people on social media by writing online reviews.
Customer loyalty is the result of the customer going through the previous four stages. You cannot simply create brand loyalty without any prior interaction with the customer. Instead, it must be built over time through positive service experiences and by demonstrating the value of your product and brand. For example, 73% of consumers love a brand because of helpful customer service
Best practices for customer lifecycle management (CLM)
Customer lifecycle management (CLM) is the process of having a maximising plan that includes a wide range of strategies to target customers at each stage, boosting customer retention rate and building customer loyalty. Here are some of the best practices to achieve good customer management at each stage.
- Fully understand your target audience
You should always have a thorough understanding of your target audience to maximise the impact of any of your strategies. 58% of content B2B marketers consider ‘audience relevance’ the most important factor in determining content marketing effectiveness. One straightforward way to do this is to create a buyer persona.
A buyer persona is a fictional character that represents a business's target customer.
To build an insightful buyer persona, you should first identify the most commonly used social channels by your audiences. The next step is to compile data from the social media analytics of these channels: such as Facebook Audience Insights and Google Analytics. The details you should include range from locations, languages, and spending powers to age, interests and stage of life.
A deeper understanding of your audience will then include an analysis of the matching points between their pain points and your offerings. This is done by asking yourself questions like what is the potential problem your target audience is trying to solve, what barriers they face, and how your product or service makes their life easier and better.
After completing this research and analysis, you can now gather all the information to create a unique buyer persona, trying to make it seem like a real person as much as possible. A good buyer persona should bring you closer to your target audiences, engaging with them as if you are interacting with a real individual.
- Invest in automation
Investing in automation helps your businesses improve efficiency and effectiveness because automation tools save your time from doing tasks that are repetitive or time-consuming and could provide more accurate information during customer service. Automation plays a significant role at every stage of the customer lifecycle.
Firstly, you can use artificial intelligence to generate personalised content and recommendations for customers during the awareness, retention and loyalty stages. According to research by HubSpot, personalized emails Improve clickthrough rates by 14%, conversion rates by 10%, and drive 18 times more revenue than broadcast emails.
Email communications that address the interests and pain points of customers directly increase their effectiveness, reducing the number of emails sent and achieving greater results. Customers are less likely to unsubscribe from mailing lists when they are not overwhelmed by the influx of emails that are not always relevant.
Secondly, at the consideration and purchase stages, automated customer service ensures faster and more accurate responses to customers’ concerns and problems. At the consideration stage, chatbots increase customer accessibility to all the information they need at any time. When customers experience a good consideration stage, they are more likely to choose to purchase later.
Automated customer service using a broad knowledge base can make purchasing steps as clear as possible and assist in solving problems encountered at the purchase stage. In addition to this, multilingual customer service supported by automation tools such as Algomo will significantly increase your customer outreach and boost the geographical expansion of your businesses.
Customer lifecycle stages help you develop a more detailed management plan to improve your business's performance. The most fundamental step is to have a good understanding of your customers and take action accordingly. Technology is the secret to success in customer lifecycle management. Make sure you take some time to understand the different automation options available.