The customer lifecycle

In marketing, the notion of customer life cycle is very important. It refers to the stages that the prospect goes through before becoming a customer. This makes it possible to identify the different phases that make up the customer/company relationship. The message as well as the offer can then be adapted according to the stage of the customer life cycle in which the target is located (for example between a prospect and a customer the hook message will be different because the latter has already achieved a purchase).

The different stages of the customer life cycle

The phases of the customer life cycle depend on the area of activity taken into consideration. The life cycle follows the evolution of the prospect into a lead to end up as a customer. In general, the different stages of the customer life cycle are as follows:

• The conquest
• The transformation
• Development
• Loyalty
• Attrition

The conquest

The conquest stage consists of making contact and attracting leads in order to make them want to buy the goods or services offered by the company by arousing their emotions through different communication channels and marketing levers. By providing information.

Identifying a hot lead can be done through:

• newsletter subscriptions and opening rate
• the number of visits to the website and the products viewed
• the number of visits made to the site

The transformation

The transformation stage represents the transition from warm lead to prospect. At this stage, the lead is requesting additional information about the company’s goods and services. He will potentially contact the company by requesting a quote, for example. If the company responds to its requests, the lead will become a prospect.

Development

The development stage occurs when the hot prospect has become a customer. He has just made his first purchase within the company. The main objective will be to inform or develop the knowledge that the customer has about the company and the offers offered. These actions aim to maintain customer relationships for as long as possible. At this stage, the company can implement cross-selling (making additional sales) or up-selling (purchasing a more expensive product with more features).

To initiate the purchasing process with hesitant prospects (abandoned shopping carts for example), it is essential to follow up with them using personalized emails or provide them with additional information.

Loyalty

The loyalty stage helps build a bond between the company and the customer. Its aim is to encourage the customer to renew an act of purchase from the company.

To be able to develop a loyalty strategy, you must identify the customer’s expectations and choose the type of loyalty to put in place. Then it is necessary to find the appropriate loyalty channels.

To establish a loyalty strategy, different levers exist:

• Set up a sponsorship program: boosts loyalty and allows you to acquire new customers.
• Develop your storytelling to convey the company’s values and commitments.
• Carrying out satisfaction questionnaires, this step allows firstly to assess customer satisfaction, then secondly to identify areas for improvement. The goal is to optimize customer relations and the goods and services that the company offers.
• Optimize your customer service by using, for example, a chatbot to reduce costs and offer instant services.
• Bringing together a community on social networks, even if this method is not at first glance the most profitable, it helps support the company’s brand image.

Attrition

The term “attrition” refers to losing a customer from the company. This stage comes at the end of the customer lifecycle. The share of lost customers is calculated using the attrition rate. This rate represents the percentage of customers lost or having changed products/services of a company. The customer begins to lose interest in the business and stops purchasing to become inactive. To calculate the attrition rate (chum rush in English), simply divide the number of customers lost over a given period by the total number of customers of the company.

Losing a customer at the end of their life cycle does not mean that you have to stop communicating with them. It is necessary to relaunch the customer so that he enters a new purchasing cycle by continuing to communicate to him the company’s product offers and services.

Why analyze the customer life cycle?

A good analysis of the stages of the customer life cycle allows us to offer a quality customer experience. By optimizing customer satisfaction, the company can meet its needs.

Properly analyzing the customer life cycle therefore allows the company:

• To optimize the performance of marketing actions by adapting the messages conveyed according to the phase in which the customer finds themselves.
• To better control your budget by adjusting the investments necessary for customer acquisition, the development of customer relationships or even loyalty.
• Provide a quality customer experience.