The old adage, ‘customer is king’ holds true even today. Successful businesses can be built by adopting a customer-centric approach. This is where customer life cycle management plays a very crucial role. Simply explained, customer life cycles are the different stages a customer goes through while interacting with a particular brand. Keeping the customers engaged and communicating with them through these different stages explains the importance and relevance of customer life cycle management.
Customer life cycle management involves measuring the performance of an organisation by assessing customer related metrics over time. It is meant to personalize customer communication by testing different sales and marketing strategies which work well with different customers.
Customer Lifecycle stages:
The different customer lifecycle stages include:
Approach: During this stage the majority of the work is with the sales and marketing team. Their task involves converting leads or potential customers into customers. Strategies such as lead scoring and segmentation are employed to study behaviour of potential customers.
Lead scoring involves scoring potential customers based on their actions. Each time they show interest in buying they get a positive score whereas a decline in interest is marked negatively. Segmentation on the other hand involves analysing a potential customer base demographically and dividing it into segments such as age, gender, income, occupation etc.
Acquisition: During the acquisition stage potential customers or leads are likely to become customers. This stage not only requires a committed sales representative to answer the possible queries and questions of potential customers but a marketing team must exhibit the usefulness and value of the product or service they are selling.
Segmenting also plays a very important role here as segmentation can ensure targeting of different demographic groups in order to market products and services suited to each demographic.
Conversion: Satisfaction with the brand’s customer experience results in the conversion of the potential customer or lead into a full-fledged customer. It is important to establish a relationship with the customer at this stage for he is not only making a purchase. It is also important to get feedback from the customer through surveys and questionnaires and modify one’s products and surveys accordingly.
Retention: Getting feedback from the customer is an important component of retention. It involves personalizing marketing and sales content and orienting it towards the need of the customer. The aim should also be to enhance customer experience by offering exclusive perks such as 24/7 support, discounts, vouchers and coupons etc.
Loyalty: Loyalty is the last stage of the customer lifecycle. The customer becomes both an asset and an ambassador for the brand. They refer the brand to others in their personal and professional sphere. These customers also serve as models for the brand as they share their brand experience on social media. Brand loyalty needs to be nurtured through customer experience and by ensuring customer satisfaction.
How to Optimize Customer Lifecycle management process
Certain best practices can be employed to make the most of the Customer lifecycle management process. These best practices include:
- Employing Data for timely engagements: In order to cater to different needs of customers or to anticipate their needs it is important to focus on relevant data. These data points include usage time, product access and feature usage.
- Measuring Progress against Key Performance Indicators (KPIs): This modular approach helps break down the customer journey into stages. Tracking progress helps one to identify what is working and what is not.
- Scaling customer success: Awareness regarding evolving needs of customers and identifying their behaviour patterns requires clubbing customers according to their characteristics and product histories. This could include for example targeting specific customer segments based on what they might need for future growth.
- Sharing customer data: Each customer interaction generates a host of data. Enhancing customer engagement and satisfaction and anticipating customer needs, requires sharing customer data without password barriers and siloed databases.
Conclusion
Customer lifecycle management is a data driven approach. Personalising campaigns for customers of evolving segments helps enhance customer retention and satisfaction. This approach gives businesses a competitive edge thereby leading to an increase in sales and enhancing brand reputation.
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