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Customer retention is essential to every business. According to research conducted by Frederick Reichheld of Bain & Company, increasing your customer retention rates even by 5% can result in an increase in profits by 25% to 95%. And the key to high customer retention rates lies in the proper implementation of customer lifecycle management (CLM). Before diving into the fundamental principles of CLM implementation, let's learn more about what customer lifecycle management is and its benefits for your business.
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In marketing, CLM is the process of assigning different stages of the customer lifecycle to metrics that are measured and analyzed to assess overall business performance. CLM covers the full lifecycle, from product or brand discovery through to conversion and brand loyalty. Because of this comprehensive view, well-implemented customer lifecycle management paints a complete picture of the customer journey and makes it easy for marketing teams to identify improvement opportunities.
CLM typically includes five stages: awareness, education, purchase, post-purchase engagement, and advocacy.
Take note that CLM is non-linear, and customers may skip some of the stages. It's also cyclical; even after a customer reaches the advocacy stage, you will want to reach out to them regularly to encourage additional purchases, upsell, and incentivize them to be ambassadors for the brand. Continue to offer timely and relevant messaging that suits your loyal shoppers. The timing of these communications should focus on retaining top-of-mind awareness of your brand.
Improve customer-brand relationships, customer loyalty, and brand reputation by incorporating CLM into your marketing efforts. The more in-tune with your business a customer becomes, the higher the chance of ongoing sales, including upselling and cross-selling.
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When implementing CLM in your marketing strategy, engage your customers at each stage. Always aim to strengthen their relationship with your brand by becoming their go-to resource for the products and services that you provide.
Instead of passively waiting for your prospective customers to come to you, be proactive in identifying your target audience and marketing to them. By narrowing the target audience, you can tailor your marketing strategy to speak to the segment's unique needs and entice them into converting. Another benefit is that the more focused your audience, the better you can optimize ad spend and ROI.
Once you identify your target audience, you can share useful SEO-optimized content to increase brand visibility. By regularly churning out relevant content, your company increases the likelihood of appearing in your audience's search results, leading to better brand recall and greater opportunities for conversions.
In the education stage, prospective customers want to know more about your brand and the products or services that you offer. You can make that process easier for them by providing as much valuable information as possible to help them make the right decision. Customers want to control their purchasing decisions, so let them learn for themselves that your brand is the right one to choose.
To back up these efforts, your support team should be proactive in reaching out to customers, especially those still on the fence. This way, you get to promote your product and establish a personal relationship with your customer. Consider chat tools to engage people who are lingering on your site. See if you can help them find what they are looking for quickly and easily. Chatbots can be programmed with your sales funnel in mind to guide visitors down the path to purchase. Better yet, they operate 24/7, even when your support team can't.
The purchase stage should be a smooth, easy process for the customer. According to a report by Google and Nielsen, 55% of conversions occur within an hour of a customer's initial search. Your brand should capitalize on this by removing any friction at the checkout page.
Companies can also provide additional support to their customers through a live chat option to quickly address their questions and concerns. This type of support helps to increase the chance that your site visitor completes their purchase.
This stage is crucial in maintaining your relationship with the customer after they've made their purchase. You want them to come back, and one way you can encourage them is by personalizing the post-purchase engagement. Reach out to them, and ask them about their shopping experience at your site and how they liked their purchase.
You can take advantage of the "thank you" page by including engaging content that leads to another conversion. For instance, you can ask customers to follow your brand's social media accounts and include videos or other personalized messages. You can also include links to blog posts or press releases about your brand, tips on how to best use their purchased product, display testimonials, and offer promotions to encourage future purchases.
Happy and satisfied customers have no problem recommending your brand to others. However, you can give them an extra boost by offering incentives whenever they refer family and friends to your business. These incentives can come in the form of discounts, promotions, and credits to their store account.
Customer lifecycle management is an essential tool that lets you track the customer journey and guide consumers towards brand loyalty and advocacy. It helps you maximize both prospective and existing customers' potential by enhancing their overall experience, resulting in higher profits and better brand visibility.
Originally published on September 27th, 2020, last updated on June 22nd, 2022.