How can you track your customer lifecycle?
Developing the right customers increases additional revenue and profitability. The customer lifecycle is the toolkit that helps you allocate the resources, which is why it is such an important sales and marketing tool.
Part of the goal with a CRM strategy is to acquire, retain, develop and recover profitable customers. In order to influence customer flows and ultimately Customer Lifetime Value (CLV), you need to know which customers to spend time on and when specific offers should be communicated to certain customers.
Therefore, you need to be in total control of the Customer Lifecycle Flows (CLC). In parallel, you need to find out which are, or could be, profitable customers.
The various stages of the customer lifecycle
To retain and develop active and profitable customers, you need to identify how your customer flows look in detail and then apply actions and activities to each stage.
Somewhat simplified, the customer lifecycle consists of the following;
New customer phase > Loyalty phase > Reactivation and renewal > Recovery phase
All businesses want new customers to become more active and at quicker rate. You don’t want to waste your resources on unprofitable customers without potential.
Do you know which customers that are actually profitable?
Systematic sales and marketing efforts based on customer lifecycle requires a clear segmentation. You need to know the value of the customers in order to be able to prioritize. Which customers purchase most often, for the most amount of money and over the longest time? Which rarely make any purchases? In short, it is about finding out who your best customers are, which customers that can become more active and which are, frankly, unprofitable and should be phased out. Rerun this analysis regularly to ensure that you recruit the right customers and that the priority of customers to develop over time is relevant. Segmentation of large databases can be tricky, so we will return to this in future blog posts.
Management of the customer depends on the stage in the customer lifecycle
By looking at where a certain customer is in the customer lifecycle, you can customize activities and offers based on facts instead of gut feeling. What do you want to achieve? Additional sales, cross-selling, better relationships, higher frequency or duration, recovering or winding-up? The customer analysis should also show which customers are loyal and returns and what characterizes these customers, and which customers leave and are in the position to become inactive. It’s time to change your approach, focus on the customer journey to deliver growing profitability.