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Engagement

Customer Lifecycle Marketing: All You Need to Know (Part – I)

Sneha Padiyath

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15 Min read

(This is the first article in a three-part series on Customer Lifecycle Marketing.)

 

What’s your favorite app?

Go ahead, take your time.

Did you think of one? Or are there too many?

Ok, let’s make this easier. What’s your favorite app for –

  • Ordering food
  • Booking a cab
  • Booking a flight or hotel
  • Buying a phone
  • Fashion
  • Groceries
  • Netbanking
  • Fitness and health

I bet you have a go-to app for, if not all, at least some of these activities. You don’t even have to think about which one because your fingers automatically tap that little icon on your phone. It’s second nature to you.

When that happens, know that there is an entire industry behind it, working tirelessly, planning, strategizing, analyzing your behavior, and ensuring a personalized, memorable customer experience that leaves you feeling good about yourself.

Now, let’s flip it. As a product owner, growth marketer, CRM, etc., do you look at your customer’s lifecycle with your product the same way?

This planning, strategizing, and personalizing of customer experience is called customer lifecycle marketing (CLM).

And in this three-part series, we will, with the help of some real-life examples, take a much deeper look at customer lifecycle marketing, its basic tenets, and how it can enhance customer experience through the implementation of effective CLM strategies.

What Your Customer Wants

To begin with, let’s look at what your customers want.

Today customer is not just paying for a winning product but also the overall experience of associating with a product / brand.

 

What customers want - customer lifecycle marketing

Further, customer satisfaction and happiness also depend on the following –

  • The frequency of your communication – Regular communication to facilitate easy customer recall
  • Offers and discounts -Discounts and other perks such as early bird access, exclusive access, etc should be offered to both existing and new customers.
  • Good quality and relevant content and personalized messages

All these factors play a vital role in determining whether a customer will choose your product or go with a competitor.

We now live in a world of hyper-exclusivity and niches. Everybody wants their place in the sun, as do you and your brand.

You can build that niche for yourself by creating a unique customer experience that fully engages with the customer at every step of their journey with you.

To start building a memorable customer journey, you must first map the various stages of the customer lifecycle with the brand and concentrate marketing efforts to engage with your customers at each stage.

Customer Lifecycle and Customer Lifecycle Marketing

CELP 1 – Customer Lifecycle and User Journey (4)

Customer lifecycle, as shown above, refers to the various stages that a customer goes through with a product or service, starting from the stage of a new customer discovering the product to becoming a loyal customer and brand ambassador for it (more on this later).

Customer lifecycle marketing (CLM) refers to a series of activities that a business undertakes to engage with customers at various points through the different stages of the customer lifecycle journey.

“CLM, in a nutshell, is about understanding customer lifecycle and applying marketing techniques to engage with customers at each stage of their customer lifecycle,” says Sagar Patil, a growth consultant, who has worked with retention marketing, CRM and product teams at brands like Flipkart and Jumia (UAE). He is also the Course Director for CELP – Customer Engagement Leadership Program – the flagship customer engagement course of hashgrowth.org.

According to him, the customer lifecycle and its many stages have always existed but what makes CLM different today is the one-on-one personalization of content and customer experience.

“Technical advancement and automation and AI have made it much easier to engage with the customer and create a personalized, highly-engaging experience,” he adds.

The first point to note when planning a compelling CLM strategy is that each customer lifecycle stage is unique. So the engagement techniques should be driven by the customer behavior within that lifecycle stage. Further, the channels you engage (email marketing, WhatsApp/SMS campaigns, in-app messaging, and website notifications, among others) should be chosen considering the nuances of the lifecycle stage and the customer behavior during that stage.

Engagement should be built through relevant content about your product, its value proposition, how it works, and its features, among others.

Let’s take a look at what the engagement would look like at each stage with some examples.

  • Discovery – During this stage, your focus should be on making an impression on the customer and driving them toward your app/platform/website so that they can learn more about your product and the value it can offer customers. At this stage, the customer is just getting to know the product. So the engagement at this stage should be through channels that potential customers most visit.

For example, seeing an ad about Samsung TVs on Facebook or Instagram or any other social media platform visited frequently by the customer or even through traditional media such as newspapers, magazines, TV, etc.

  • Onboarding – In the onboarding stage, you need to establish trust with your customers so they are enticed to use your product. At this stage, content relevant to the product, its features, and the value it provides should be shared with potential customers.

For example, Scripbox, an online financial planning and investment app focuses its messaging on the core value proposition of financial planning made easy during the onboarding stage. It takes customers through its various offering such as mutual funds, stocks along with various plans for financial goals such as retirement, creating an emergency, planning a vacation saving taxes, etc. to showcase the ease with which customers can plan their financial needs with the help of just a few clicks.

  • Activation – During this stage, you should nudge your customers towards activating, i.e., making that first purchase or buying that first subscription through the app/website/platform. You should entice your customers through in-app messaging and notifications by making them believe they are truly missing out on an exciting opportunity.

For example, a customer has registered on your crypto app and parked money in the e-wallet. Here, you should nudge that customer to start trading and purchasing by displaying the prices of various cryptocurrencies through push notifications. Your messaging should convey a sense of urgency or FOMO – Fear of Missing Out. Some examples:

“👀Hey there! We noticed you haven’t started trading yet. Here are a few cryptocurrencies you might be interested in.”

“😲You won’t believe the prices at which some of these cryptocurrencies are trading.”

“🤑Your e-wallet is ready. Time to take your money work for you. Start trading today!”

  • Repetition – Having activated the customer through the first purchase, you should aim to get the customer to make the second and consecutive purchases of your product. Your messaging should remind them to relive their first experience with you by repeating the purchase.

For example, Suppose you own an online music app that allows you to create your own playlists. If a customer’s first-year subscription is about to expire, send them in-app messages, emails, or push notifications reminding them that they might lose exclusive access to upcoming artists and their new music and their own playlists curated with a lot of research and care. You can entice them with renewal offers and discounts too.

  • Habituation – Having purchased your product at least two times, the customer should now turn to your product as a habit. Here, you should aim to make your product the default choice for your customer and habituate them via repeated in-app reminders to auto-renew the purchase, say once every month.

For example, suppose you are an online wellness retailer and a customer has bought the entire set of your hair care products twice in four months. Your message to such a customer should be to auto-renew their purchases every two months via discounts and offers. Since this is a repeat customer, you can reach out to them on multiple channels including WhatsApp, emails, SMS, in-app messaging, etc.

  • Loyalty – Here, the customer loves your product and is habituated to using your product. At this stage, your content or messaging should focus on increasing the customer’s lifetime value and further habituating them to your brand. You can upsell or cross-sell products to customers through content focused on the benefits of owning these products. Use in-app messages, email campaigns, product recommendations on the product listing page, etc to deliver this content.

For example, supposing a customer has been buying sports paraphernalia from your app, such as sports shoes, sweatbands, protein shakers, etc., then you can upsell, i.e., sell similar products but with a higher price tag to them. For instance, if they buy Sparx, then upsell them shoes from Adidas or Nike, focusing on their superior quality and higher brand value. Similarly, you can cross-sell, i.e., sell other products to them, such as smartphones, clothes, etc.

  • Advocacy – Here, your aim should be to get more customers per loyal customer. At this stage, it might be relatively easy to get customers to recommend your product to others as they are delighted with your product and its services. But you could entice them through referral programs that offer them discounts on future purchases or free goodies with their next purchase if they can refer the product to another potential customer.

For example, if you are a ride-hailing company, you can offer your customers an additional 15% off on their next trip or a free trip if they recommend your app to others. But the condition here must be that the 15% discount or free trip will only be triggered if the other person registers and completes their first ride booked through the app.

The Channels You Choose

The channels you communicate through such as email marketing, WhatsApp/SMS campaigns, in-app messaging, website notifications, etc., also matter as they can encourage or discourage customer response. The choice of the channel depends on the lifestage of the customer, the timing of the message and the channel preferred by the customer.

For instance, during the activation stage, sending a WhatsApp message at the appropriate time with a discount code on the first purchase is most likely to convert into a first-time purchase. Similarly, during the loyalty stage, sending mail campaigns with product recommendations (upsell or cross-sell) or in-app messages every time the customer logs onto the app for higher conversion.

Also, personalized marketing messages must be sent at regular intervals by engaging marketing automation tools via well-executed campaigns. These can help build long-lasting customer relationships and chart a customer journey unique to each customer category.

What makes a Customer Lifecycle Marketing Strategy Effective?

Get these three things right if you want an effective customer lifecycle marketing strategy:

    • Maintaining consistent and regular engagement with customers so that your brand remains top of mind for them.
    • Personalizing customer experience via customized content and communication so that customers feel special about associating with your brand
    • Ensuring that the timing and target audience of your communication is on point

But most importantly, your customer lifecycle marketing strategy should help you improve your topline by increasing each customer’s lifetime value (LTV), i.e., the average revenue generated by a customer during their entire period of association with the brand.

Building the Right Team

Before you get into planning and strategizing engagement with your customer, you need to plan the organization of your team well.

“Organize the team in such a way that no crucial stage of the lifecycle is missed out,” says Sagar.

Divide your teams based on different stages in the customer lifecycle. Don’t overburden one team with the responsibility of planning and strategizing engagement for customers across various stages. In addition to being overwhelming, this can also be counter-productive as no single stage will receive the individual attention and focus it deserves.

Moreover, the organization of your team will also depend on the size of the company you are in, he adds.

For a start-up or a small brand, your focus should be on the onboarding and activation stages, as at this stage, acquiring customers is your number one priority. You could have two separate teams or a single team, depending on the size of your team.

For an SME, your focus should be more on repetition and habituation, along with onboarding and activation, so organize the teams based on these priorities. For an enterprise or large company, your focus will be on all seven stages, and the resurrection of churned customers.

“The idea is to set KPIs for each team and each stage, instead of combining them and having an overall goal. Make sure you use the right tactics to engage with customers at each stage,” Sagar emphasizes.

If you are doing this, then you are not doing CLM…

Here’s a list of what not to do when planning a good CLM strategy.

  • Carpet-bomb all your customers with the same strategy and same messaging. A new customer clueless about your core product does not want details of the add-on features. Save that for another day!
  • Reach out to your customers on platforms that are inconvenient or uncomfortable for them. For instance, don’t send WhatsApp messages to customers who have not opted for that service. This may seem like an obvious statement to you, but brands are yet to perfect this art. Many brands have lost customers or at the least upset them owing to their intrusive messages and emails.
  • Ask for too much information. In their enthusiasm to serve customers better, brands often want to know everything about them, leading to too many questions or personal details being solicited during registration or through a survey. Before you go on a detail-amassing spree, work on earning customer trust. Once they trust you, they would happily part with that information.
  • Play fast and loose with customer data. Context is critical; data without context can be misleading. Data collected should be used sparingly to dig out relevant insights to target your customers.

The 4 Ws of Customer Segmentation in Customer Lifecycle Marketing

Now that you know what not to do, let’s look at what you should do.

The first step should be to profile your customers by answering the 4 Ws of customer segmentation – Who, Where, What, and When.

The answers to these three questions are key to creating compelling communication and customer engagement strategy for each stage of the customer lifecycle.

Understanding the ‘who’ and ‘where’ will help you plan your next move, i.e., the ‘what’ and ‘when’ of the communication.

The 4Ws of Segmentation in customer lifecycle marketing

‘Who’ – This means segmenting your customers based on psychographics, technographic, and demographic preferences and attributes. Understanding who your customers are their likes and dislikes, and differentiating between them is crucial to CLM. Segmenting also helps distinguish between potential, existing, dormant and churned customers (more on them in the third part of this series).

‘What’ – Here, understand what the customer wants to hear from you. Do they need details about the product or service? Do they need to be encouraged to buy or repeat their purchase via discounts and offers? Or do they need to be reminded about those items in the cart that they have abandoned? This is where personalization of content comes in, and you need to be careful about what to communicate to whom. The wrong messaging could hurt your relationship with the customer.

‘Where’– This means understanding where your customers would most likely engage with you. While brands follow a multichannel approach, not all channels will be effective all the time. Choosing the right channel will increase the likelihood of the customer engaging with the product. Cart abandonment reminder notifications might be more effective through in-app or push notifications. The choice of channel is as important as the messaging itself.

‘When’ – This means planning when you should communicate and engage with your customers. Reaching out to all customer segments across all communication channels at a particular time is like throwing darts blindfolded hoping that at least something will hit the board. The communication timing also depends on the message and the channel you choose. The right channel for communication can increase the probability of the customer engaging with and reacting to the message.

What’s Next?

The next two articles in this series will take an in-depth look at the customer lifecycle journey.

The focus will be on the path a happy customer takes, from the discovery phase to becoming a brand ambassador for the product. We will also cover the path a customer takes when they are disgruntled with the product or service and how to win such customers back.

If you wish to be notified about the upcoming articles in this series, sign up below for our newsletter which brings you the best content and updates from #GROWTH.

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