Definition
The customer lifecycle is a framework that describes the various stages a customer goes through in their relationship with a brand. It provides a high-level view of the customer’s journey, from the moment they become aware of the company to the point where they become a loyal, long-term advocate. Managing this lifecycle is crucial for maximizing customer lifetime value (CLV).
Examples of Lifecycle Stages
While models vary, a typical customer lifecycle includes:
- Reach/Awareness: A prospect discovers the brand for the first time.
- Acquisition: The prospect takes a first step to engage (e.g., provides an email, starts a trial).
- Conversion: The prospect makes their first purchase and becomes a customer.
- Retention: The customer continues to get value from the product, has a good experience, and makes repeat purchases.
- Loyalty/Advocacy: The customer is so satisfied that they actively recommend the brand to others, becoming a promoter.
Advantages/Benefits of Understanding It
- Maximizes Customer Lifetime Value (CLV): Helps you identify opportunities to increase customer value at each stage (e.g., upselling to retained customers).
- Improves Retention: By focusing on the post-purchase stages, you can proactively reduce churn and keep customers happy.
- Targeted Marketing: Allows you to send the right message to the right person at the right time (e.g., an onboarding campaign for new customers vs. a loyalty offer for advocates).
- Drives Growth: Understands that the most sustainable growth comes from retaining existing customers, not just acquiring new ones.
Related terms
- Customer Journey
- Customer Experience (CX)
- Customer Lifetime Value (CLV)
- Churn Rate
- Retention
- Upselling
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