A Different View Of The Customer Lifecycle

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, keeping them happy, buying and  generating revenue.  In "olden” days we called this as a customer funnel. More recently, the consensus is we’re talking about a circular journey that encompasses stages like information gathering, multichannel interaction, conversion, and advocacy, with some brands 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 third-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, while 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, where a customer can be placed 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 value.  Some customers will want to be spoken to often, while others are less interested. 

Most important, 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. As I tell my five-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. When that person gets married, gets a little older and her needs change, she should be getting messages about SUVs and family-friendly cars.  This simple recognition translates to an understanding that she should not be continuously messaged the same products, but that they will need to be resold on the new products.  This is more than just CRM -- it’s a full-scale approach to reselling her as a customer.  I have been getting Jeep ads for the last 15 years because I once owned a Jeep, but my lifestage 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, with input from a human mind as well to better determine how they can work more effectively.

Don’t you agree?

2 comments about "A Different View Of The Customer Lifecycle".
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  1. charles shillingburg from APN Staffing & Employment Solutions, July 23, 2014 at 12:03 p.m.

    Some of the problem stems from how you define loyalty, who you are and the degree to which your organization is siloed. Take your Jeep example. If you are Jeep, then you want someone who bought a Jeep to buy another one. If you are Fiat/Chrysler, you want someone who bought one of your Marks (Jeep) to buy another of your Marks (Chrysler, Dodge, Fiat, Jeep, etc.). The first is a very narrow view and does not take into account changing customer needs (and is a far more ineffective tactic), where the second is more customer centric. Looking more broadly at Loyalty (and Advocacy), Loyalty can be defined on a household and even extended household basis (add neighbors and other households they influence), encompassing many ages and diversified needs. Thus, your Acquisition and Loyalty circles continuously overlap and expand, like ripples in a pond from a stone's throw.

  2. Ty Ragland from Ragland Research LLC, July 27, 2014 at 12:54 p.m.

    Overall, a very useful article. Some of my comments are probably more semantic than substantive.

    In my opinion, the lead for the article is at the end -- that acquisition and retention are very different animals. That seems to conflict with an early point -- that acquisition and retention are two sides of the same coin.

    My experience is that how different the acquisition/retention process/messages are depends, in part, on how educated the acquisition prospect is. The less educated (for example, never used the category before) the more different the message needs to be.

    I use slightly different terms for the lifecycle relationship: 1. Breadth (acquisition) -- getting new customers; 2. Depth -- optimizing how much they buy; 3. Length (retention). That's because different strategies are used for each of the three stages. For example, a promising growth opportunity for many categories with Light Users is to learn how to convert them to Heavy Users.

    The article speaks of customer attrition; I have found that we can anticipate what causes attrition through what we call At-Risk Analysis of survey data. Better to know ahead of time than do a lost customer study after the fact.

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