How does the customer lifecycle evolve with marketing?
The role of marketer goes beyond just driving awareness and generating demand, once they hand over a prospect to the sales team the job isn’t over.
Welcome to the 59th edition.
Original post published on CMSwire.com
It usually is believed that a marketer’s job is done when it hands over the prospect to the sales team. But to improve customer retention and increase lifetime value it only makes sense to develop an effective customer lifecycle which involves marketing at every stage.
For any B2B SaaS, the customer lifecycle process is very challenging and complex which brings a high risk of losing prospects when handling it to different stages and teams.
To understand a marketer’s role in the customer lifecycle, we first need to see what it is:
What is the customer lifecycle?
Customer Lifecycle helps companies understand how customers are experiencing the product, what actions they are taking and how they are moving down the funnel. It puts the customer in the center of the process and sees how they move along the buying process giving insights on their behaviour interacting with your product.
When you stop looking at the customer lifecycle from a marketing perspective, it’s easy to forget that customers look at your product differently.
Here’s what a customer lifecycle looks like.
When do you need to focus on the customer lifecycle?
It’s important to determine how fast the buying decision is made by the customer and at what price they buy it. If the price of the product is very high it can’t simply depend on the customer lifecycle and will need a sales funnel to monitor the process.
If you see how Slack is easy to use and easy to convert from a free plan to a paid plan, as the product isn’t that complicated, but that’s not in the case of Salesforce. As its free plan doesn’t have a significant impact on converting customers to a paid plan.
Therefore, it’s important to check what business model your product fits in - bottom-top or top-bottom approach. Based on that you create the strategy that provides the most value to the customers throughout every stage of their relationship with the product.
What do stages of the customer lifecycle look like & where does a marketer need to keep an eye on?
To successfully make a customer go from being aware of the product to becoming a loyal customer takes a lot of effort and each stage has its goals: awareness, acquisition, conversion, retention and loyalty.
As there are different stages in the customer lifecycle, you would want to start by mapping out the entire customer journey and then set objectives for all stages.
Stage 1: Open funnel, wide scope
The marketing materials you create build awareness which comes at the top of the funnel and brings visitors to the website but not all have the probability of becoming a prospect.
At this stage, a large number of people will interact with you, you need to make sure to have a good impression, which comes from:
Building awareness by sharing helpful content - company blog, social media, newsletter, etc.
Establish authority by creating webinars, e-books on industry-related topics
It becomes the first goal to bring traffic towards the website mostly through campaigns, marketing materials and building brand awareness.
Stage 2: Become a prospect
What makes the visitor a prospect is when they show interest by signing up, downloading an ebook, filling out a form, etc. This helps build a contact list and track the conversion rate. It also gives you an idea of whether your content is attracting quality leads that are targeted enough to convert them for the next stage.
It becomes an acquisition stage when you learn about their goals, and pain points and explain how their problem will be solved.
When you’re converting a prospect one of the straightforward ways is to build an email marketing or live demo system. Once they leave their email address or go through a live demo, it shows they are interested in the product. This brings us to our main goals here:
Address their concerns
Show them how the product works
Overcome any obstacles that may be keeping them from converting.
Stage 3: Deliver 1st value
There’s usually a reason behind why people download or sign up for the product, to experience the value and reach that aha moment immediately.
It becomes a goal to deliver the initial satisfaction as the marketing team has already spent tremendous resources on bringing that prospect.
To reach this conversion stage, your marketing team needs to be well-prepared to communicate those values to the customers.
You’ll need to give your prospect one more push, after raising awareness and nurturing the lead, which can be done by offering a freemium plan or offering a free trial for a few days or by building a personalised onboarding.
As soon as a new customer signs up, collect a few data, such as:
Why they are using the product
What tasks will be involved in their workflow
What problem they are looking to solve
All these responses will help you segment customers and build a more personalised customer experience.
Stage 4: Become a customer
It’s so true that the team spends the vast majority of time bringing traffic to the website rather than spending on the customer’s first interaction with the product.
While the first aim is to always build user retention we also need to focus on account expansion. With the free trial, you give customers the taste of premium features and additional value which increases the chances of lifetime value and creates a sense of urgency to upgrade the plan.
The first goal after getting a prospect inside the product is to deliver the core value for the first time. They move from being a free user to a paid user. Hence, they become an active user.
Now, they set up the account, connect the account or integrate with other apps. This is the right stage to build retention with a combination of collecting feedback and identifying churns.
Stage 5: In-product experience
In-product experience isn’t limited to onboarding customers but to constantly track if the customers can work around the product for a month. Track their daily activities and weekly and monthly time spent. Acting upon this data ensures that repeated customers stay subscribed as long as possible.
Your work doesn’t end at customer acquisition because post-purchase nurturing throughout the different stages is crucial to retaining new users long-term which will be done by in-app marketing.
Here’s how you do it:
Identify the features that you’d like users to discover
Send in-app messages or notifications, this keeps them in the loop for the latest updates or product improvements.
Build something like gamification through notification when they successfully complete something to encourage them to take the next steps.
Stage 6: Loyal customer
This can be a final stage but the customer lifecycle is an ongoing process and moves in a circle.
A customer becomes a loyal customer when they upgrade to additional features, bring teammates, refer to more people and install the habits of using the solution on a regular basis. This transforms into a loyal advocate of your product with high lifetime value and referral potential.
You build a strong relationship with loyal customers:
by offering them exclusive offers
Reward programs
Listen to them
Offer them credits or gift cards
Developing a strategy
Now, as shown in the illustration above, moving down the funnel changes the role of who handles what in the team - marketing → sales → customer support.
Developing a strategy could form into marketing efforts, product improvements or customer initiatives. With each stage, you will need to depend on different types of KPIs to evaluate the efficacy of strategies and this will help you see which areas need improvement or which areas you should double down the efforts.
In the end,
As you can see, the customer lifecycle is a long and multi-stage journey. If you advocate it right, you’ll be able to convert prospects into loyal customers at a faster pace.
Thanks for reading! Until next time!
Ritika 👋
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