For decades now, the internet and social media have been regularly changing businesses. The lifecycle of the world has sped up, and so has the marketplace. As such, companies must pay close attention to the details that their customers experience when they use their products and services — it’s crucial that they’re inspired to return through the years. Customer lifecycle management is meant to address exactly this.
What Is Customer Lifecycle Management?
Customer lifecycle management, or CLM for short, is how a company directs and measures a relationship between customers and business. To put it more plainly, it’s ensuring that your company’s relationship with your customers goes well, from their initial exposure to your product or service to — and throughout — its continued use.
Thus said, your customer lifecycle management practices ought to be tailored to what you want your customers to experience. They aren’t just the matchmaker between you and your customers — they’re also the relationship counselor for years to come.
Why Your Customer Lifecycle Matters
The reason your customer lifecycle is important comes down to customer churn. Customer churn is a crucial metric for your growing business. This measures the amount of business lost in a given amount of time, which is important to track both your successes and failures.
Naturally, all businesses lose customers from time to time. However, it’s simply more cost-effective for businesses to retain their customers instead of continuously finding new ones. Not only does the loss of a customer mean the loss of revenue, but it also means your customer acquisition cost rises. In fact, it can cost five times more to acquire a new customer than it does to keep one. Overall, then, it’s better to put measures in place to keep the ones you have and to establish their loyalty to you.
Here’s relevant data that bolsters this claim:
- Companies lose approximately $1.6 trillion a year due to customer churn.
- 65% of customers say they’ve switched brands due to a poor experience.
- 93% of consumers say they will make a repeat purchase with a company that has good customer service.
- According to a recent report, 78% of customers say they’ll stay with a company after a bad experience if they have good customer service.
Giving your customers a great experience is vital in mitigating customer churn and increasing your company’s profits. That’s where customer lifecycle management is essential.
The Customer Lifecycle Management Stages
A customer lifecycle management strategy will differ from company to company. Ultimately, you’ll want to create a strategy as unique as your customers. The goal is to create a positive experience — from introduction to loyalty — that will make your customers want to return for more and sing your praises to others.
Here are the stages your customers go through and how best to approach them:
1. Approach or Reach
This first stage is when a customer searches for a solution to a given problem they have — that’s the reach. If a company reaches out to a prospect with a solution they’re selling, then it’s called the approach. In both cases, this is the first impression they’ll have of your company.
At this stage, your company will need more than a clever advertisement or sales pitch. The customer needs to see something genuine in your business. This is a chance to not only demonstrate your value to your prospect, but also to show them a bit of who you truly are. Show them your caring side and your passion for solving their problems. Prove to them that you’re interested in the long haul instead of just sealing the initial deal.
Now that they’ve made contact, they’re interested in what you have to say. Before thinking that this is their chance to listen to you, it’s critical at this point that you are the one who listens. They’ve sought out solutions, but they need someone that understands their problems.
The stage is executed in different ways depending on how the customer has made contact. If it’s over the phone, your sales team will need to be great communicators, able to give and take information throughout the exchange. It’s also important that your team be available for a live chat online, whether through messaging or a virtual session. How you receive and offer information in this stage is critical to moving on to the next.
You’ve made the sale, but it’s not over yet. You don’t generate profit from a one-time sale. Rather, it’s repeat business that will grow your company. Good customer lifecycle management here is making the purchase process easy and confirming for the customer that you’re still there for them afterward. Follow-up with them and ensure that they’re satisfied.
This is where you turn a one-time sale into a lifetime of profit. You want to know how your customer’s experience was and if there’s anything you can do to improve your process. Ask for feedback from your new customer, and be sure that you listen. Your company will need to be flexible to meet its customers’ needs.
At this point, it’s important to consider your customer’s state. Determine whether they’re happy and stable, happy but at-risk of leaving, or if they’re unsatisfied and unhappy in some way. The information you collect on their post-purchase state will inform what the best customer lifecycle management approach will be. For instance, if you can tell that your customer is unhappy, then now isn’t the time to pitch an upsell — unless you know for certain that the upsell is what will make them happy. Listen and observe so that you understand the details of where they’re at on their customer journey.
All of this leads up to brand loyalty. If your customer had a positive experience in the previous four stages, then you’re on the right track. However, here is where you manage the customer’s state. Your goal is to move them into a happy state so that you can present them with opportunities to become loyal to your company.
Once you’ve made your customer happy it’s important to discover exactly what made them happy. Collect feedback and testimonials — this also helps market to other customers. Create a referral program that rewards your happy customer for spreading the word about what you have to offer. This will not only help you generate sales but also create a genuine sense of loyalty in your current happy customers.
From here, it’s a good time to offer upgrades and upsells to your happy customers. Gather more feedback from them and find out what they want. Once you gain insight into their needs and wants then offer them what they’re asking for and they’ll return again and again.
Finding What Works For Your Business
Ultimately, customer lifecycle management best practices are determined by conducting an analysis of your customer’s current lifecycle and using data to adjust it into the ideal flow.?
Quala combines insights from frontline teams with customer data to provide a complete view of customer health. This drives a healthy customer lifecycle, allowing you to manage the process of turning prospects into buyers and buyers into brand loyalists. Request a demo today — find out how Quala can help you retain your customers and grow your business.