Customer Lifecycle

The customer lifecycle refers to the process people go through to learn about, engage with, and buy from a company. Its stages fall under the processes of attracting, engaging, and delighting customers, and the specific steps involve awareness, conversion, purchase, activation, renewal, and referral.

Definition of Customer Lifecycle

The customer lifecycle is a term that describes the different steps a customer goes through when they are considering, buying, using, and remaining loyal to a particular product or service. This lifecycle has been broken down into five distinct stages: reach, acquisition, conversion, retention, and loyalty. An important point to understand the customer lifecycle is that because it follows a cyclical pattern, it never truly ends. The ultimate goal is to build strong brand loyalty and to create customers that will become advocates for your company, referring your product or service to their friends and family. To achieve this, companies must make sure they stay relevant and are continuing to offer value to their customers.

Importance of the Customer Lifecycle

Understanding the customer lifecycle is essential to the ongoing success and growth of a business. The lifecycle should be overseen as a whole and not segmented into silos. For example, if a business focuses all of its attention on the early stages (e.g., reach, acquisition, conversion), but disregards the post-purchase stages, it will suffer in the long run -- the business will successfully acquire new customers, but those customers will become unsatisfied and leave, creating customer churn.

Stages of the Customer Lifecycle

There are six stages of the Customer Lifecycle. They represent the journey a customer takes to move from first learning about a brand to being the one telling others about it.

source: Astute Solutions

• Stage 1: Awareness: Here is where the relationship with a customer begins. when they first become aware of the existence of your brand, product, or service. But in most cases, work will have started long before this, because while consumers see an average of 362 marketing messages each day, they only notice 86 of them. And the old marketing rule of thumb is that a consumer has to see your message seven times before they’re even aware of it! Today, though, consumers are just as likely to first hear about a brand via a word-of-mouth recommendation from friends, family members, or social media influencers.
• Stage 2: Engagement (Optional): Customers making a more significant purchase, like buying a new car or planning a theme park vacation, will often take this optional step of engaging with a brand. Once they’re aware of a brand, they’ll start seeking out marketing content by following that brand on social media, signing up for emails, etc. In addition, they’ll start paying attention to what others are saying about the brand and how it responds to service requests and complaints. Brands that publicly engage and provide customer service through social media have an advantage at this stage.
• Stage 3: Evaluation: Every customer goes through some version of this stage, whether it’s months of research and comparison or just a quick “gut check” before making a decision. One of the most effective ways to stand out from competitors at this point is by offering robust digital self-service. Just like customers seeking support, consumers who are evaluating products or services start by trying to find the answers themselves. It’s also important to give agents and store associates access to the same knowledgebase that backs the brand's self-service. Over 90% of consumers expect to receive consistent information over multiple channels; giving conflicting answers could easily take a brand out of the running.
• Stage 4: Purchase: Stage 4 is crunch time, when consumers make their final decision. Providing the help potential customers need is critical at this point: 83% of consumers require some degree of support while making an online purchase, and 53% will abandon that purchase if they can’t find a quick answer to their question. In addition to self-service, live chat could make the difference between making or losing the sale. Over 40% of consumers say that having questions answered by a live person during an online purchase is one of the most important features a website can offer. Consider using intelligent escalation to proactively offer chat assistance to customers who seem to need a final push to move from considering a product to actually purchasing it.
• Stage 5: Product and Support Experience: Attracting a new customer is six to seven times more expensive than keeping an existing one. With that calculation in mind, it’s easy to understand why some say that the customer lifecycle doesn’t truly begin until Stage 5. Now is when consumers start to form their lasting opinion about products and brand. Delivering a quality product can ensure success at this stage by providing exceptional service and support. Every interaction is an opportunity to prove that building a relationship with customers is the objective and not just making a sale. In fact, 76% of consumers view customer service as the true test of how much a company values them, and 97% say it’s an important factor in deciding which brands to choose or remain loyal to.
• Stage 6: Bonding: This final stage is when relationship is cemented. However, the brand must continue to provide quality service and support, nurturing a connection with proactive engagement, and taking every opportunity to create an emotional bond. If you do those things well, you’ll see your customers jumping back into the lifecycle by buying again, buying more, and—best of all—encouraging others to join them.