What Is Customer Lifecycle? (Plus Importance and Stages)

By Indeed Editorial Team

Published 16 November 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

For many businesses, keeping existing customers may be easier than converting leads to paid users. To achieve growth, you can dedicate resources to keep your current customers satisfied longer, which often requires understanding and managing the business-client relationship effectively. Understanding the lifecycle of a customer can help you create strategies to keep them committed to the business for longer periods. In this article, we define what the customer lifecycle is, explain its five stages and discuss its importance for business success.

What is the customer lifecycle?

The customer lifecycle is the process through which leads develop an interest in a product or service, buy from a business and become the company's long-term customers. This cycle has five stages, each of which helps the company create and maintain a mutually beneficial relationship with customers, converting them into loyal patrons that do business with them continuously. The marketing department of companies analyses the lifecycle of customers to ensure that they understand the pain points of patrons and create strategies and offers that can help retain their business and loyalty.

Related: What Is Good Customer Service? Definition and Guideline

Importance of knowing the client lifecycle

Every stage of the customer lifecycle is important, from the moment a potential consumer first sees Each stage of the cycle gives the marketing team a chance to analyse the strategies currently in place to bring in new customers and evaluate what they're doing successfully to retain them long-term. Knowing what consumers want and need can help you prepare special offers that increase customer engagement and sales. For example, managing the engagement on your social media accounts and tailoring the visuals and content on your websites can show you understand what is missing in your market.

Related: What Is Customer Focus? (Plus How to Improve and Benefits)

The 5 stages of the customer lifecycle

The following are the five stages of the customer lifecycle:

1. Reach

Reach is the moment a customer discovers a business's product or service. At this stage, the primary aim of a business is to gain the potential customers' attention. Companies use a wide range of channels to reach customers, including:

  • social media posts and events

  • digital marketing and promotional campaigns

  • blog posts and articles

  • affiliates

  • sales representatives

  • physical shops

  • word of mouth

2. Acquire

At this stage, a business makes potential customers aware of its offers. This typically involves a prospect looking for more information about a product or service to determine whether it's ideal for their requirements. They might visit your website to find information about a specific product or follow the social media channel to chat with a representative or get updates about your offers. This stage represents the first point of contact between a business and its prospects, which makes it important to provide detailed information to convince them the product or service solves their problems.

During the acquisition stage, it's important to provide leads with multiple channels of communication, such as social media, emails, live chat and phone calls, so they can reach the business easily for any information. If the product has a trial version, you can encourage customers to try it before getting a paid version to ensure it meets their requirements. You can also encourage them to follow the company on social media or subscribe to its newsletters to get updates on new offers.

3. Evaluation

At this stage, the customer evaluates different options before buying a specific product that satisfies all their requirements. During the evaluation stage, customers compare offers based on factors such as the functions, features, design, durability, price, after-sales support and customer reviews. Your primary goal at this level is to build a relationship with the customer. Engage them actively, and respond to their questions and concerns regarding product pricing, uses and other subjects they might want clarifications on before deciding to buy.

One way to make this stage stress-free for customers is to provide a comprehensive FAQ section on the website where they can find learn more about their product of interest. You can also write detailed blog posts and share them on social media or create a live chat service people can reach quickly when they want to decide to buy a product.

4. Purchase or retention

At the purchase stage, the prospect decides to buy the product or service. Once they become a paying customer, it's important to ensure they continue to patronise the business whenever they require the product. To do this requires nurturing the relationship between the company and the customer. This can involve an increased level of interaction through customer service surveys to get feedback about their experience with the company's product.

If the feedback shows the customer is unsatisfied with the product, providing quality and prompt customer support can improve their experience and turn them into loyal, long-term customers. Other strategies for retaining customers include offering sweeteners, such as discounts and free shipping and engaging the customer to learn how to best meet their demands.

5. Loyalty

The last stage is loyalty. At this stage, the customer gets optimal satisfaction from their purchases and relations with the company. Besides continuing to do business with the company, they may also become ambassadors for the organisation, sharing their positive experiences with their network. This can lead to referrals and more opportunities to convert new customers and upsell and cross-sell existing buyers.

An important strategy for gaining and retaining customer loyalty is to ensure that you maintain the excellent customer service experience that helped you win them. You can offer loyalty rewards, provide discounts and give other exclusive benefits for loyal customers to reward them and further enrich their experience and relationship with the company.

Related: Client vs. Customer (Definitions, Differences and Examples)

Best practices for managing the consumer lifecycle

Here are some best practices for getting optimal value from the entire touch points of the customer journey:

Create personalised interactions with prospects and customers

To get maximum rewards from prospects and customers, personalise your interactions with them at each stage of the lifecycle. For example, when a prospect is at the acquisition stage, send them helpful content that demonstrates your product's ability to solve the prospect's problems at an acceptable price. When they're ready to buy, you can then offer incentives such as discounts and other limited-time deals to encourage them to purchase.

Analysing how your prospects and customers interact with your content and media can reveal their position in the lifecycle. For example, if a customer is reading customer reviews and pricing information, they might be comparing your product to others in the market. Making it easier for them to find the information and following up can convince them to buy and also help retain their business in the long term.

Related: What Is Customer Experience Management? (And How It Works)

Provide multiple channels of interaction

Managing the buyers' lifecycle effectively requires consistent engagement. Identify the channels your customers use to communicate and engage them actively and consistently with the right messaging. Providing an omnichannel experience that helps you update customers and get feedback in real-time can help prevent communication gaps and help you gain deeper insights into how to treat customers well.

Understand the audience's preferred channels of communication and create consistent and value-adding engagement campaigns targeting each stage of the lifecycle. That way, the information each person receives aligns with their level in the buying journey, making it easier to choose your offers.

Use customer surveys to understand their experience

Surveying existing customers can help you better understand their buying experience and create improved strategies to increase satisfaction. Actively engage customers with surveys and other information-gathering tools to learn how they perceive your brand and understand the utility they derive from the company's products and services.

These exercises can reveal lapses in the lifecycle that can help you improve customer retention and enhance their buying experience. For example, customers might be satisfied with their purchases but feel that your customer support is slow or doesn't provide enough channels of communication. The business can use this feedback to improve those areas to promote customer experience.

Related: Customer Support Skills: Examples and Ways to Improve Them

Identify reasons prospects didn't buy

It's also important to engage prospects that didn't purchase your products to learn about the factors that prevented them from becoming your customers. Prospects can choose an alternative for several reasons, and surveying them can show you strategies, features and pricing plans your competitors are using to convert your potential customers. With this information, you can work on prospects' concerns so that more of them become paying customers.

Nurture customer relationships after purchase

Turning customers into loyal patrons requires nurturing them continuously after they buy from you. It requires developing a positive and beneficial relationship with customers so they feel the business appreciates their patronage. This can be as simple as sending a check-in email every month or sending exclusive limited offers to loyal customers. It can also involve following up with the customers to resolve any post-purchase issues they might have with your products.

An important aspect of retaining customers is to collect feedback from them, so the business can identify their specific pain points and create products and services that help patrons solve issues promptly at the right price.

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