Wouldn’t it be great if you could get customers to find your products or services, buy them once, and become loyal customers for life?

Back in the real world, we all know it doesn’t quite work that way. It takes great products, great customer service, and a commitment to managing the customer lifecycle to grow and retain a customer base.

What Is Customer Lifecycle Management?

Customer lifecycle management is about managing the process your customers go through as they move through the buying journey. By creating awareness, nurturing customers, and creating an exceptional customer experience at each stage of the journey, you can turn prospects into lifelong advocates for your brand.

The Stages of Customer Lifecycle Management

The customer lifecycle is similar to the buyer’s journey but continues after a customer has made a purchase and extends throughout their life. Here are the six lifecycle stages:

  1. Reach
  2. Acquisition
  3. Conversion
  4. Retention
  5. Loyalty
  6. Advocacy

Your Customer Success strategy helps you meet prospect and customer needs at each stage of the customer lifecycle.

Reach

In the reach stage, customers have become aware of a problem or need. They begin to search for the solution to their problem. This is the top of the funnel, where consumers are just becoming aware of who you are and what you do.

The customer may be comparing products from your competitors, researching online, and taking a look at reviews. Good strategies at this stage include search engine optimization, search engine marketing, inbound marketing, social media, and digital advertising targeted to buyer personas.

Acquisition

When customers connect with you — whether it’s by going to your website, product page, or landing page or by calling you — they have moved to the acquisition phase.

The strategy at this stage of the customer lifecycle is to answer their questions by providing educational information while anticipating and meeting their needs. Content that answers common questions or demonstrates the usage of products or services is effective.

The content should help prospective customers facilitate purchase decisions. Offers, blog posts, videos, and pricing pages can all help provide this information. Live chat and phone support can also be helpful, especially if customers are at the decision stage.

Conversion

In the conversion stage of the customer experience, the prospect officially turns into a customer and makes a purchase.

At this stage, the customer is ready to dive in and get started with your product, so you want to reinforce your value proposition. If there’s not a smooth, tailored process between the sales and onboarding cycle, customers may become confused or frustrated and stop using your product before they even get started.

Retention

Once the sales are made, you’re only partially through the lifecycle process. Your next phase is aimed at customer retention and satisfaction.

Besides thanking customers for their purchase, you need to practice some customer relationship management (CRM) to nurture them. Customer onboarding really acts as a customer’s first impression of your product and sets the tone for the relationship moving forward. From there, every touch point a customer has with your product is an opportunity to improve their experience and impression of your company.

Loyalty

When you create a loyal customer, they become an important asset. Brand loyalty keeps customers coming back for more.

Brand loyalty doesn’t just happen; you have to nurture your customers to create that loyalty. Once you get there, though, you can build repeat business. Your best customers purchase more often and spend more money when they do. A returning customer spends an average of 67% more than a new customer.

Advocacy

User or customer advocacy typically refers to a customer of yours who is so satisfied with your product that they refer others around them to sign up for your product as well. And while this is a fantastic and cost-effective way to grow new business, with User Success we take advocacy one step further. Not only should advocates refer other potential clients to you, they also should be so loyal that they’ll bring you along to any new company they join in the future.

The ultimate goal is to become so ingrained in a user’s workflow that they can’t imagine work without your product, so anywhere they go, they’ll bring you with them. It’s central to our idea of User Lifetime Value (uLTV), wherein the lifetime of a user doesn’t rely on the account, but continues for as long as they’re in the workforce.

Why Customer Lifecycle Management Is Important for Customer Success Managers

A Customer Success Manager (CSM) helps manage customer relationships to provide a strong customer experience. As such, success managers play an important role in creating customer engagement to promote customer health, leading to happy customers. A Customer Success Manager may work directly with large accounts using customer data and Customer Success software to help onboard customers and enhance the customer experience.

A Customer Success team is focused on relationships rather than products or marketing. The team works to align customers’ goals with those of the company to produce better outcomes and robust customer lifecycle management.

When the team is focused on building an organization that prioritizes Customer Success, it becomes obsessed with meeting customers’ needs. Often, this means providing additional support services that go beyond problem-solving — for example, providing an exceptional onboarding and deployment process, continuing to engage and nurture customers, and reinforcing the value proposition to encourage additional sales.

Customer lifecycle management is important for the Customer Success team because it frames the customer’s journey. Even when customers are happy with their purchase decision, a lot can go wrong. Four out of 10 customers say they have stopped doing business with an organization because of poor customer service, according to Statista. Customer Success helps you provide that support, helps sales and marketing teams collaborate to send a consistent message, and helps create better internal alignment.

Key Customer Lifecycle Management Metrics to Pay Attention To

The most successful organizations consistently measure customer satisfaction for both new customers and existing customers. That’s not all, however. They also measure the customer experience at various lifecycle touchpoints.

Here are the five key categories CSMs need to measure to reduce their churn rate and increase their retention rate to build recurring revenue:

  1. Customer acquisition cost (CAC)
  2. Customer retention
  3. Product performance
  4. Customer satisfaction
  5. Economics

Customer Acquisition Cost

One of the biggest expenses for any business is its CAC. Many startups with great products and services have failed because they couldn’t control their CAC.

It’s not as simple as tracking spend for a new customer. You need to know where your efforts are providing the best ROI. This means tracking individual campaigns and strategies by approach and channel across each stage of the lifecycle.

Customer Retention

To build a sustainable business, you’ve got to keep customers. Customer churn is one metric you can use, as it indicates whether there’s a problem somewhere in the value chain or your products or services aren’t meeting customers’ needs.

Your retention rate correlates closely with your ability to generate recurring revenue, making it a key performance indicator (KPI).

Product Performance

Product usage metrics are important for ensuring customers are using your products. For example, a company that sells software as a service (SaaS) wants to make sure customers continue to use its product. If they stop using the product, it won’t be long before they churn.

You also want to measure product performance to ensure the product lives up to its claims and provides the value customers need and expect. Monitoring product requests, bugs, and support tickets can help you be proactive in identifying potential problems for remediation.

Customer Satisfaction

Customer satisfaction is an essential part of customer lifecycle management. The most common metrics used for this are customer satisfaction score (CSAT) and Net Promoter Score (NPS).

CSAT indicates the degree to which customers are satisfied. Most unhappy customers won’t tell you there’s an issue until they stop doing business with you, but CSAT helps you identify unhappy customers earlier and gauge how well you are managing the customer experience.

NPS measures the likelihood that customers will recommend your business to others. This helps you measure the depth of their satisfaction. When referring your product or service to a friend or colleague, customers are putting their reputation on the line.

In both cases, it’s all about getting useful customer feedback and tracking your performance over time against baselines.

Economics

Tied closely to your customer lifecycle management will be customer lifetime value (CLV). CLV measures a customer’s total value to a business over the entire relationship. It’s important to know this metric to determine the appropriate amount of spending you should commit to in order to acquire and retain customers.

When your CAC exceeds your CLV, your business model needs adjustment. Although many companies are unbalanced as they build or launch new product offerings, a business that consistently sees a CAC that’s higher than its CLV over the long term is destined to fail.

How Parlor Can Improve Your Customer Lifecycle Management

Parlor helps organizations build stronger relationships across the entire customer lifecycle. By monitoring important users segments, you can accurately track their progress across each lifecycle stage and identify the key indicators that may signal churn. In this way, you can be proactive in your efforts to improve your customer retention.

By measuring key touchpoints in the customer lifecycle, you can monitor the impact of your efforts to attract new customers, improve customer engagement, and build brand loyalty.

Parlor is the first-ever User Relationship Management system. Proactively engage each user with a unique in-product experience – personalized based on their individual relationship to your product and impact on your business.

Plus, Parlor provides a single source of truth. Allowing you to aggregate any type of feedback from any source – bug reports, product enhancements, support issues, sales blockers – into a single system of record for all outstanding customer needs. This gives insights across the entire customer journey to give you the data you need to enhance your customer lifecycle management and customer experience while maximizing your user lifetime value.

Customer Success Managers and customer service teams benefit in multiple ways, including:

  • Monitoring customer interactions across multiple platforms.
  • Organizing customer feedback in a centralized system.
  • Identifying the highest-impact needs based on analytics.
  • Closing the loop with customers by automating communication, progress, and improvements down to the individual customer level.
  • Providing customized support to the key users who drive renewals.
  • Identifying risk indicators and upsell opportunities
  • Managing every customer lifecycle management stage.

Parlor also integrates seamlessly into your workflow and your tech stack, including:

Want to learn more about how Parlor works and how you can turn potential customers into brand advocates by better managing the entire customer lifecycle? Check out User Management or schedule a demo.

Conclusion

Customer lifecycle management is all about supporting your customers as they move through the buying journey. By creating awareness, nurturing customers, and creating an exceptional customer experience at each stage of the journey, you can turn your prospects into lifelong advocates for your brand.