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What Customer Lifecycle Management (CLM) Is & How It Works

Chris Van Wagoner

Director, Lifecycle Marketing @ AdRoll

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.

For more on customer retention trends:

What Is Customer Lifecycle Management?

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. 

  • AwarenessThe initial point of contact when a prospective customer first encounters a brand. Discovery could occur through ads, referrals, and social sharing, or the consumer's online research. At this stage, the individual may be evaluating competitors' products or services as well.
  • Education: Once the consumer chooses to learn about a brand or product, they typically dive deeper into available online resources—website, social media, and third-party information like articles and ratings. This phase is crucial because brands have an opportunity to answer the important questions, become a trusted resource that delivers value to the consumer, and demonstrate how their product or service will solve the consumer's problem.
  • Purchase: At this stage, your customer has gathered enough information and has made their decision to purchase. During this phase, issues will typically indicate a problem with the checkout process, like expensive shipping rates, technical problems with the cart, or lack of coupons.
  • Post-purchase engagement: Follow-through is critical in a complete CLM process. After the purchase is complete, brands should reach out to their customers to ask about their experiences with the product/service, the buying process, and customer service. Using this information, the company can improve its products, services, and sales and support experience.
  • Advocacy: This is the ultimate goal of a successful customer lifecycle. At this stage, a happy consumer will become an advocate of your brand. Your loyalists may promote your products or services on social media, make recommendations to their friends, or leave glowing reviews. These actions add up to invaluable social proof and endorsements necessary for the successful modern business. 

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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Key Principles of CLM Implementation

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.

Awareness: Define your audience and post targeted content

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.

Education: Offer valuable information and engage a proactive support team

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.

Purchase: Streamline the checkout process

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.

Post-purchase engagement: Keep it fresh

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.

Advocacy: Encourage recommendations

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.

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