Seasoned marketers know in the ongoing relationship between business and customer, it’s normal to go through multiple stages. Called customer lifecycle stages, they span everything from initial awareness of your brand to becoming a paying customer and maybe even a word-of-mouth advocate for your company's products or services. Unlocking the potential in each of these stages, however, requires a thorough understanding of customer needs.
With the right approach to your customer lifecycle, your business can turn your target audience into loyal customers and existing customers into brand advocates.
What is the customer lifecycle?
The customer lifecycle is the stages a customer cycles through in their relationship with a business, from initial awareness to brand advocacy. Businesses manage each stage of the customer lifecycle with customer relationship management (CRM) methods and CRM software, with a goal of turning a target market into a community of repeat customers.
Will all your potential customers turn into loyal brand advocates if you shepherd them through the customer lifecycle? No—in fact, most will not. But every prospect represents a chance for you to make a sale and create an ongoing relationship.
Jeremiah Curvers, the co-founder and CEO of mattress brand Polysleep, knows how important it is to nurture customer relationships. On an episode of the Shopify Masters podcast, Jeremiah explains that his company’s most effective advocates are its customers.
His goal was to “build a very strong customer base that, even though they don't buy a mattress every three years, whenever they have the opportunity to talk to their family or friends, will most likely refer your brand.”
That’s the dream outcome of customer lifecycle management.
Stages of the customer lifecycle
These are the five stages of the customer lifecycle:
1. Awareness
This first stage describes the period when someone develops awareness of your brand, products, or services. At this point, you’re helping prospective customers learn you exist and get a feel for your brand values. Success in the awareness stage will hinge on how effectively you build brand recognition through digital ads, social media activity, your blog SEO strategy, and traditional advertising (TV, radio, and print). Established businesses may also gain brand awareness via word-of-mouth referrals from existing customers.
2. Consideration
In the consideration stage, you’ve captured the attention of your target audience; now it’s time to convince them to visit your website or swing by your store. The goal at this stage is to convince prospective customers that your product or service is the perfect solution to their problems. Use targeted marketing campaigns, informative email marketing, customer testimonials, and comparative infographics, to give consumers the information they need to choose your brand over your competitors.
3. Conversion
The conversion stage (also known as the purchase stage or acquisition stage) involves turning prospects into actual customers by closing the sale. Ease this process (and boost conversion rates) by providing a seamless purchase experience so there’s no friction during checkout. Otherwise, a negative experience may prompt a prospective customer to abandon their cart or shift to a competing brand.
You may find that closing the first sale with new customers is the most difficult. Repeat sales may be easier, provided that you give your clients a top-notch customer experience.
4. Retention
The customer retention stage focuses on nurturing the customer relationship to encourage repeat business. Offer excellent customer service and respond to customer feedback quickly and proactively. Distribute customer satisfaction surveys to help you understand what people do and don’t care about.
Other ways to retain customers include issuing personalized offers, running loyalty programs, and providing free resources like downloadable templates or recipes. These tactics can encourage customers to return to your business knowing they’ll have a positive, consistent experience.
5. Advocacy
In the customer loyalty and advocacy stage, satisfied customers have developed an emotional connection to your brand. Not only are they loyal repeat purchasers, but they’re also starting to advocate for your brand and steer new prospects into your sales funnel.
Happy customers show brand loyalty by leaving positive reviews for your product or service and taking time to note the product features, prices, or customer support that made their experience so positive. They may also write about their customer experiences on their social media pages, or tell friends and family about your brand. These valuable customers can do a lot to grow your customer base.
What is customer lifecycle management?
Customer lifecycle management (CLM) is the process of optimizing the buyer journey so as many prospective customers as possible can make it all the way through to the loyalty stage. CLM is as much about taking action and reducing friction as it is about learning from your customer data.
Determine which marketing techniques work so you can amplify those tactics. Identify where users dropped off during website visits so you can improve those pages. Each stage feeds into the next, so the work you do to improve brand awareness will also help improve conversion rates down the line.
How to optimize the customer lifecycle
- Develop a strong brand awareness strategy
- Offer seamless onboarding with self-service resources
- Engage with consistent, personalized communication
- Create personalized offers and promotions
- Use retention-focused marketing campaigns
- Gather and act on customer feedback
- Implement a referral program and loyalty incentives
- Offer rewards for reviews
Consumers just becoming aware of your brand need something different than those returning to your store to make another purchase. Nurture the process at every stage of the customer lifecycle with these tips:
Develop a strong brand awareness strategy
Use search engine optimization (SEO), social media marketing, digital marketing campaigns, and engaging educational content to increase visibility and draw interest to your brand. Tell your company story when possible to differentiate your brand from the rest of the pack. “You better have a very strong story,” Jeremiah advises, “because it has to be very compelling for a customer to decide to go with you rather than someone else.”
Offer seamless onboarding with self-service resources
Provide customers with clear guidance, tutorials, and a solid FAQ page so they can quickly understand and begin using your product or service without friction.
Engage with consistent, personalized communication
Instead of relying on one-size-fits-all messages, tailor your marketing to groups or individual customers. You can do this through email marketing tools, social media marketing campaigns, and targeted on-site messaging.
“You can pump as much content as you want and have amazing traffic,” Jeremiah says, “but if it only dilutes your brand … and makes the customer doubt your capacity to write something compelling … you're really not helping your brand.”
Create personalized offers and promotions
When it comes to personalization, go beyond mere messaging. Offer exclusive discounts to repeat customers, using data insights from their past purchases and brand engagement to sweeten the deal.
Provide exceptional customer service. Every customer service operation should address issues quickly and make customers feel valued through empathy and proactive support. This boosts satisfaction, reduces churn, and promotes loyalty.
Use retention-focused marketing campaigns
Employ drip email campaigns, retargeting ads, and personalized landing pages to re-engage existing customers and advance their purchasing process.
Gather and act on customer feedback
Collect insights through customer surveys, reviews, and social media interactions. Act on this data to improve the customer experience and tailor future offerings.
Implement a referral program and loyalty incentives
“It's just so expensive nowadays to acquire a customer,” Jeremiah says.
Referrals from existing customers will be one of your most cost-effective options, so reward repeat customers and encourage them to bring in new customers with referral programs.
Offer rewards for reviews
This has a doubly positive effect: The reviews entice new customers, and the discount code rewards incentivize existing customers to make additional purchases.
Customer lifecycle FAQ
What are the five stages of the customer lifecycle?
The five stages of the customer lifecycle are:
1. Awareness
2. Consideration
3. Conversion
4. Retention
5. Advocacy
Why is the customer lifecycle important?
The customer lifecycle is a visual tool that helps businesses understand what each type of customer needs as their relationship with the business evolves. When you give concerted attention to customer lifecycles, you may find your business forging stronger connections with customers, while also driving long-term growth and loyalty.
Why is customer lifecycle management important?
Customer lifecycle management, when done well, helps you keep your existing customers happy and boost their customer lifetime value (CLV). With a thorough customer lifecycle understanding, you can improve every aspect of the journey from awareness to loyalty, and build a wider customer base. If you run your business based on satisfying existing customers, you’ll have a blueprint for acquiring new ones.
