Customer Lifecycle: Definition, 5 Stages and Strategies

Most businesses aren’t looking for one-time customers; they’re interested in developing strong, long-term relationships with their customers to benefit from repeat business. But to accomplish this objective, you first have to understand the buying process from your customer’s perspective.

Analyzing this process, called the customer lifecycle, increases your awareness of customer experience and lets you identify the marketing, sales, and customer support tactics that are working well—and strategies that need improvement.

What is the customer lifecycle?

This term describes the distinct phases your customers experience as they travel through your sales funnel—from becoming aware of your company and the products or services you offer to making a purchase. It also includes the activities after a transaction that help you gain repeat customers.

Customer lifecycle is an ongoing process, resembling a loop, rather than a line with a clear start and end. Even after a new prospect becomes a customer, the cycle begins again as your business tries to build customer loyalty.

Why is it important for brands?

If you want repeat, loyal customers, then your business needs to recognize how your customers experience each step of the customer lifecycle and ensure you have the relevant content, tools, and strategies to support their journey. Improving customer experience helps move more customers through each stage.

Is the customer lifecycle loop linked to customer loyalty and retention?

The customer lifecycle loop focuses on developing a strong connection between your company and its customers—even after they’ve made a purchase—making it linked to customer loyalty and retention. Retaining customers and building customer loyalty depends on having consistent, valuable engagement with your customers.

The 5 Stages of the Customer Lifecycle

To make the most of your customer lifecycle, you first need to recognize each stage of the process.

Reach

At this first stage, your prospect knows they have a specific problem to solve and are looking for the right product or service for their needs. They’re nowhere near ready to make a purchase; instead, they’re still researching different companies and comparing solutions.

To ensure your business grabs their attention, turn to both outbound and inbound strategies, such as running social media ad campaigns, email marketing, pay-per-click (PPC) campaigns, or search engine optimization (SEO).

Acquisition

This stage starts as soon as a customer interacts with your business, whether that’s by visiting your website, interacting with your social media accounts, trying out your offerings in person, or having a conversation with one of your sales representatives. The acquisition stage is where you start building stronger connections with customers, though your method for doing this depends on how the customer starts the interaction.

For customers you acquired through digital channels, for instance, you’ll want to offer them helpful, relevant web-based content that answers their questions and helps them overcome any purchasing objections. You’ll also have a more personalized exchange of information if a customer’s first interaction is with a sales representative. Not only will your sales rep be answering customer questions and guiding them through your products, but they’ll also need to gather information about the customer—like their current needs and preferences, along with their contact details.

The acquisition stage can have many touchpoints, so it’s important to stay engaged with prospects and offer support throughout their journey.

Conversion

Once a prospect feels satisfied with the amount of information they’ve learned, have had a positive experience with your company, and are ready to make a purchase, they’ve entered the conversion stage of the customer lifecycle. This is the stage where you close the sale, so knowing how customers are evaluating your products or services can help you set your offerings apart from your competitors and showcase your value.

Retention

The customer lifecycle doesn’t end after a prospect converts into a customer. Instead, you’ll now turn your efforts into retaining your customers and building brand loyalty. You first want to make sure your customers are satisfied with their purchase and buying experience, which can be measured through customer satisfaction surveys or customer reviews. Having touchpoints with customers post-purchase will help you improve both your offerings and customer support moving forward.

Next, consider ways to help retain customers through reward programs, such as earning points for discounts on future purchases, exclusive memberships, or referral bonuses are just a few ways to encourage customer retention and loyalty.

Loyalty

Customers reach this stage of the lifecycle after making numerous purchases or becoming long-term subscribers (for subscription-based businesses). Often, their purchases will shift to include higher-priced products or services than their initial transaction. Being able to analyze your customers’ purchasing patterns and identifying their post-purchase needs are key to unlocking customer loyalty.

At the loyalty stage, customers also demonstrate their devotion to your brand by recommending it to friends and family through social media or by leaving customer reviews. They’re both promoting your brand while offering insights into the customer experience and support your business offers. Improving these methods can grow customer loyalty.

4 Benefits & Advantages of Customer Lifecycle Marketing

Centering your marketing strategy around the customer lifecycle offers can help your business:

Increase customer value

Prospects and customers will receive more valuable engagement along their journey, helping you retain more customers post-purchase. Repeat customers are easier to sell to, since they’re already familiar with your brand and products or services. They result in higher customer lifetime value (CLV) and revenue.

Reduce costs

The reason most business owners know the phrase, “It’s cheaper to keep a customer than acquire a new one,” is because it’s true. It’s estimated to cost businesses 5 times more to acquire a new customer than to retain existing ones. By retaining existing customers, your business can lower your customer acquisition costs (CAC).

Improve customer satisfaction

Your customers want to feel seen and valued by your company, which this method of marketing helps accomplish. Customer lifecycle marketing focuses on improving customer satisfaction at every stage, so you can meet your marketing goals while improving customer engagement.

Boost conversion rates

Customer lifecycle marketing helps raise conversions of new prospects and existing customers alike by aligning your marketing efforts with their specific needs and preferences. But, you’ll also need to focus on brand management to convert them into long-term customers, as customer loyalty greatly depends on their experience with your company.

How to Map & Analyze Customer Lifecycle

Creating a customer lifecycle map will help your business visualize and evaluate each stage, so you can monitor where customers are in your sales funnel and what customer behaviors to expect.

Analyzing the Reach Stage

In the first stage of your map, you’ll be analyzing if people can easily find your business and learn how they become aware of it.

Where does a prospect first hear about your company?

There are various ways prospects can come across your business, including targeted TV and radio advertisements, social media platforms, sponsored ads on digital platforms (like websites, podcasts, etc.), and search engines. Knowing which channels are driving awareness can help you determine where you should invest your marketing efforts.

How are you performing on these channels?

You not only need to know where customers are coming from but also which channels are most successful. Consider measuring indicators or reach, such as number of impressions or your click-through rate. Choose your best-performing channels to get a higher marketing return on investment (ROI).

Analyzing the Acquisition Stage

The second stage of your map is where prospects gather information, making them more likely to eventually become customers. Your business will need to assess:

What kind of content is on your website right now that can help a customer make a decision?

Your website needs to provide much more than your basic business information. Customers will want to learn your products’ or services’ key features and what sets it—and your company—apart from others. You may also need to provide them with support or answer questions. To do this, you may need to add new content to your website or try out a customer support chatbot.

Do you have a blog? Is it easy to navigate and read?

Blogs are a great way to provide leads with helpful, valuable information so they can learn more about solutions to their problems (and how your company’s products or services can help). But, it needs to be easy to find and accessible on any device, since many people use their smartphones to research and shop. Consider linking to your blog in your website’s header, making your blog searchable by keywords, and ensuring posts are mobile-friendly.

Analyzing the Conversion Stage

Once a prospect is in the conversion stage, you’ll want to look for any obstacles that may prevent them from making a purchase.

Is the purchasing process easy and straightforward?

Do customers have to create an account to make a purchase, or do you offer an option for guest checkout? Do you offer diverse payment options, including digital wallets like Apple Pay or payment plans? While these may seem like small factors, they can become huge barriers to customers closing the deal.

Are there blockers to making a purchase?

Make sure your domain is secure (by having an SSL certificate) so buyers won’t be afraid of sharing their financial information. Also, check the user experience of your site and checkout page for bugs, slow loading times, and outdated information, which can all hurt conversions.

Analyzing the Retention Stage

At this stage of your map, customers have made a purchase and you’re evaluating ways your business can improve customer experience to boost retention rates.

How do your customers feel about your business?

Learning what your customers like and dislike about your company can help you continue to focus on the right aspects while adjusting things that frustrate them. Do they need support to get the most out of their purchase? Answering this can help guide your actions.

Have you made it easy for customers to do business with you again? For example, do you include a one-click reorder button in your user portal?

Are customers aware of your other products or services? Can you make personalized recommendations? Taking these steps, plus setting up subscriptions or easy one-click ordering buttons, can boost retention.

Analyzing the Loyalty Stage

Building loyalty can be challenging, so at this stage of your map, you’ll want to assess your relationships with customers.

Have you included social media follow buttons on your website and marketing emails?

Customers are more likely to recommend your business the easier you make it for them, like by adding share or follow buttons in your correspondence and on your website.

Do you engage with current customers in your social media profiles and comments?

Customers reach out on social media for a number of reasons, including needing support or sharing their experiences. By responding to them quickly, you show that you value them and their opinions and are willing to resolve issues promptly, which helps increase customer satisfaction and loyalty.

Customer Lifecycle Management: 5 Strategies

Managing your customer lifecycle isn’t difficult once you understand the steps to take at specific stages of the process. Here are five strategies for customer lifecycle management.

Identify your target audience.

For the reach stage of your customer lifecycle, your first step is to identify who makes up your target audience by developing buyer personas for your products or services. These personas represent your ideal customers and include demographic and behavioral data as well as projected interests, pain points, and needs they could have.

Share relevant content.

Prospects also need to be able to find your business, which is why creating relevant, useful, and SEO content is essential at the reach stage. This strategy ensures your business pops up during their research and offers applicable information to help solve their problems.

Provide self-service resources.

Does your website have a knowledge base customers can access? Creating one is a smart strategy for the acquisition stage of your customer lifecycle, as it lets prospective customers handle their own research and get questions answered—without the assistance of your customer support team.

Use proactive customer service.

Even if you offer prospects a lot of resources, they still may have questions or concerns. Having your team reach out to them offering assistance, free trials, or product demos during the acquisition stage helps develop customer relationships and keeps prospects moving through your sales funnel.

Remove friction from the purchase stage.

To boost conversions, you want to make your checkout process as smooth as possible. Each step in the purchasing process is a potential hurdle, and technical problems can completely derail a sale. Keep your checkout page simple and consider adding live support to address any customer problems at the conversion stage.

You don’t have to manage customer experience or customer lifecycles all on your own, Podium can help. Our AI-powered lead conversion platform offers the tools you need to improve every stage of your customer lifecycle: from greater reach and customer engagement to increasing conversions and customer retention. Watch a demo to learn how.