The customer lifecycle is almost as hot a buzzword as “big data”, but what exactly is a customer lifecycle? Is it really a circular journey? Is it linear?
Most marketers build their strategy around two distinct objectives; customer acquisition and customer retention. I tend to think of these two challenges as two sides of the same coin. It’s about trying to bring prospects into the fold and convert them to customers, and once they’re customers to keep them happy, keep them buying and keep them generating revenue. In ‘”Olden” days people looked at this as a customer funnel, and more recently the consensus is we’re talking about a circular journey that encompasses stages like information gathering, multi-channel interaction, conversion and advocacy, with some products relying on upselling to maintain customer value while others simply rely on repeat purchase.
I would ask you to consider a Venn diagram, where one circle refers to the acquisition journey and the other refers to the retention and monetization journey. You can also picture the infinity loop if that image is clearer. The acquisition journey is about initial conversations that lead to consideration and purchase, with a refinement of messaging on an ongoing basis that relies on audience-based targeting and message optimization. Your strategy begins with a target audience, and that audience is revised based on further information you gain through analysis. You discover attributes of expanded audiences, using lookalike modeling and 3rd party-based prospecting, which enable you to go deeper and generate more reach for potential customers. Your analytics will yield customers, who convert at different stages. Some prospects require more information than others, but eventually they either convert or are whittled out of the mix. This optimization creates ongoing efficiency and your tolerance for risk dictates how much additional budget and how many new attributes are dropped into the mix to try and drive additional conversions.
The second circle represents the retention and monetization journey, and a customer can be transferred over at any time during the acquisition process. Some customers convert quickly while others take more time and consideration. Once you have them, you have to determine the right track for maintaining a relationship and increasing their customer value. Some customers will want to be spoken to often, while others are less interested. Most importantly you have to remember that a customer simply needs to be recognized. Recognize them when you see them with any of your ads or messaging and treat them as a valued customer by not showing them acquisition messages. This simple act of recognition goes a long way. Like I tell my 5 year old – if you ask me for something and I say “yes”, there’s no need to keep asking. If I’m already your customer, treat me as a customer and build that relationship.
The overlap of the two circles in this diagram represents two unique stages of pass-back. These are the customers who you may be losing through attrition or they may be customers who need new messaging to be upsold because their needs have changed. Think about auto manufacturers; they sell a young, 20-something an economical, yet sporty car and when that person gets married, gets a little older and their needs change they should be getting messages about SUV’s and family-friendly cars. This simple recognition translates to an understanding that they should not be continuously messaged the same products, but that they will need to be resold on the new products. Its more than just CRM – it’s a full-scale approach to reselling them as a customer. I have been getting Jeep ads for the last 15 years because I once owned a Jeep, but my life stage does not warrant that message and I’d think the manufacturer could recognize that at this point.
Acquisition and retention are very different animals and they each require a different set of tactics. Data can be used, and audience-based analysis can be leveraged, to ensure maximum efficiency for both of these areas, but more recognition should be given to how these two strategies either do or do not intersect. They need to be set up properly before being automated, but a human mind should always be applied to better determine how they work more effectively.
Don’t you agree?