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5 Most Important Stages of a Customer Life Cycle

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Customer Loyalty Life Cycle
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Customer Relationship Management (CRM) solution aligns marketing, sales and customer support functions to provide better customer service and gain detailed insights about your business. CRM software identifies, evaluates and channelizes multiple marketing, sales and customer service efforts through a single solution.

Customers nest at the core of any business and as long as you have happy customers, there will be a positive influx of business and references. But, have you ever paid careful attention to how and when your visitor turn into a customer? There might be a display ad or a search query which brings the consumers to your website/ landing page and the journey begins from there. Mentioned are just a couple of sources to attract buyers, but actually there are various demand generation activities used to attract your audience and then multiple touch points to nurture them further into lead, opportunity and finally the deal.

What is a Customer Life Cycle?

Right from the first interaction to getting converted into a final transaction customer for business, a visitor/ consumer goes through several conversion stages and the action taken during this process defines the customer life cycle value. Have you ever imagined that may be a simple chatbot could be the first point of interaction and that could lead to building and nurturing relations through the final point of sale?

For example, a visitor is attracted to your website by seeing an ad or organic search query. After that, he is further engaged by a chatbot on your website to help ease his navigation experience and find/ educate about things he is looking for. The chatbot will collect contact details and through re-marketing/ emails the visitor ill further be nurtured to move further in the funnel. After a couple of actions which are defined as MQLs like filling forms, subscribing to blogs, downloading marketing materials, or clicking specific likes, or following on social media, etc. this prospect will now be treated as a Marketing Qualified Lead (MQL).

The marketing department will then decide certain parameters to further promote the MQL as an SQL (Sales Qualified Lead). The SQL will pass through the maximum set parameters in a buyer’s persona and would have raised interest in product demo or quote. Further, with a couple of more conversations, the SQL is promoted as an opportunity and close as a deal. This entire process is called as the Customer Life Cycle.

Implementing customer relationship management (CRM) software requires understanding of customers and their purchasing behaviors, as it will create a base to steer the planning in the right direction. These behaviors vary within the customer life cycle and it is important to identify the stages. Also, it is imperative to understand the needs of customers at each stage.

Let us have a look at five main stages of customer life cycle :

1. Reach

This is the initial stage of customer life cycle. Primarily, this stage requires performing marketing activities to promote your brand or services. This will invite the customers or audience to know and learn more about your product. It helps in generating more leads. Marketing activities can be performed through various sources such as social media, banner advertising or content writing. It is important to identify the effectiveness of each event at this stage. It also helps in adjusting the marketing activities if required.

2. Acquisition

At this stage, you start receiving prospect’s information such as email address, contact number and other details. This initiates relationship building with prospect customers and take it forward. Engaging prospective customers with email marketing, sales calls or sending personalized messages work well at this stage of the customer’s life cycle.

3. Conversion

This is the stage where your prospective customers will turn into an actual paying customer i.e. you can start expecting revenue from them. At this point, it becomes obvious that you are able to convince the customer that they need goods or services and are ready to give you a deal. An important thing to focus at this stage is to make sure your customer has a pleasant and satisfied buying experience. This also is the time to analyse the effectiveness of your marketing techniques up to this point. It also helps in determining what strategies are working best to bring revenue.

4. Retention

Converting prospects into customers does not end the customer life cycle. From this stage, building customer relationships with regular engagement helps to keep your brand fresh in their mind. This will also help you to get repeat business or references or cross sell.

5. Advocacy

Having advocates for your company will help you in the long run. They not only give repeat business to you, but also are also willing to promote your goods or services to more prospective customers. This will be done by developing strong relationships through entire customer life cycle. They will refer your products or services to their friends and family members.

What is a Customer Lifetime Value?

Customer Life Cycle value is the prediction of how much revenue a business will achieve from a customer throughout the journey. As companies are not aware of how much business and referrals a customer will bring and how long will he stay, Customer Lifetime Value (CLV) becomes important to determine the monetary worth of the customer.

How to Calculate Customer Lifetime Value (CLV)?

CLV = Profits earned from every customer x average tenure in years

Let us assume the following:

  • Profit earned from customer every year = $2,000
  • Business Tenure = 3 years
  • Customer Acquisition Cost = $1,000

Therefore, the Customer Lifetime Value here would be:

$2,000 (annual profit earned) times 3 (tenure) less $1,000 (acquisition cost) = $5,000 = CLV.

That is,

CLV = $2,000 x 3 – $1,000 = $5,000.

How CRM can help a business?

Customer Relationship Management (CRM) software will help create buyer personas, customer mapping and integrated with marketing automation software to understand multiple analytics like click-through-rate, lead to opportunity conversion, deal won/ deal loss/ reason for deal loss, etc. This will help businesses get an idea of what is working in favor and against them. Businesses can think of CRM software as a diagnosis tool for marketing, sales and customer service/ support.

Role of Inbound Marketing in Customer Life Cycle

In order to get the most out of a customer, the first and foremost step is to identify the right type of target audience for your business. Customer Profiling plays a vital role in marketing your product/ services. There is no point in marketing your products/ services to customers who are not interested. It is as simple as not selling a comb to a bald person because he cannot use it. Unlike earlier times where push marketing used to be at the crux of every business, marketing strategies now focus more on the inbound tactics to reach out to their customers. Content marketing is one of the most successful tactics of inbound strategy. With the right content strategy, businesses can tap audiences in every stage of the funnel – Awareness, Consideration and Decision. Content pieces like blogs, how to articles, infographics, videos, listicles, eBooks, whitepapers, data sheets, etc. will help companies reach out the right set of target audience. This will result in the faster conversion rates.

Nowadays, people connect with brands through empathy. Instead of luring your customers into forced business, educate and nurture them enough that they would not feel the need to look out for other options. The Pareto Principle rightly explains that 20% of your business comes from the 80% of your customers. Therefore, some customers are more important than others. And hence, it is important to identify which accounts are going to help you more with billable.

To conclude, an all-inclusive and robust cloud based CRM software would be a great companion throughout the customer life cycle for a business. To know how such a solution can work wonders for your sales and marketing people, contact us here. You can also drop us a mail at for free demo and consultation.

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