What Is Customer Life Cycle Management? (With Stages and Steps)

By Indeed Editorial Team

Published May 25, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Customer life cycle management is a system of tracking and improving your customers' experience with your company to encourage them to make repeat purchases. There are five stages in customer life cycle management, from approach to loyalty. If you're a marketing manager, you may want to learn more about how implementing customer life cycle management can improve your strategies. In this article, we discuss what customer life cycle management is, the benefits of using it, the stages involved and how to manage the customer life cycle.

Related: 11 Methods for Building Customer Loyalty

What is customer life cycle management?

Customer life cycle describes the process a customer undergoes between noticing a company or product and returning to the company to make purchases. Customer life cycle management is what the marketing management team does to optimize each phase of the life cycle, from approach to loyalty. This may include developing interesting marketing campaigns or implementing effective rewards programs.

Related: Loyalty Rewards Programs Benefits to Modern Businesses

Benefits of customer life cycle management

These are some benefits of life cycle management:

  • Encouraging purchases through market timing: One aspect of customer life cycle management is tracking the life cycle of your products and offering a discount or suggesting the product through an advertisement.

  • Providing a competitive advantage over others: You can increase customer loyalty and profits with this management. For example, when you offer a loyalty program but your competitors don't, customers are more likely to purchase your products so that they can earn rewards.

  • Optimizing each facet of customer experience: One aspect of customer life cycle management is ensuring that your customers are happy with every part of the interaction, from marketing to customer service. By optimizing your customer experience, your loyal buyers are more likely to refer their friends and acquaintances to your company.

  • Streamlining your company procedures and operations: When you implement customer life cycle management, it creates clear objectives around customer satisfaction that can make it simpler to make business decisions.

  • Producing more value for your consumers: Customer life cycle management places a lot of importance on value for the customer, so implementing this system can help you focus on value as a company.

Related: Managing the Product Life Cycle: Definition and Examples

Stages of the customer life cycle

These are the five stages of the customer life cycle:

1. Approach

This is the first stage of the customer life cycle, in which the potential customer notices the company and sees value in what the company may offer them. The approach stage likely begins when the potential customer sees an advertisement for the brand or finds your product in an online search.

During this stage, you may gather data about where your leads first hear of your company to better allocate your marketing funds. You can assess your social media strategies and click-through rates to determine how you might adjust your approach to attract more potential customers.

2. Acquisition

The acquisition is the phase in which the potential customer starts a conversation between themselves and the company. This may be the customer visiting your company's website or engaging with the company on social media.

Once the customer reaches this stage, you want the content on your website and social media to inform them about your products and services. Make your contact information available, from live chatting to phone numbers. If your website doesn't have a blog, consider starting one so that you can provide more content and value to your customers. Having a simple, easy-to-navigate website can make it easier for customers to purchase your products.

3. Conversion

The conversion stage is the one in which the potential customer purchases a product or service. They convert from a potential customer into a buyer and enter a relationship with your company. Offering the customer a generous refund policy may make them more likely to move to this stage in the customer life cycle.

4. Retention

In the retention stage, the buyer has only purchased a product or service one time. The company then encourages them to make another purchase by offering customer service, technical support and communicating with them about their recent purchase. Asking customers for feedback and addressing any of their concerns is an important part of the retention stage.

You may also track the life cycle of your products or services and use the timeline to aid in customer retention. For example, if your customer pays for one year of your services, you may offer them a discount on a renewal or upgrade near the end of the year.

5. Loyalty

When the buyer has reached this stage of the customer life cycle, they are loyal to the company and may continue to make purchases with them as long as they continue to receive excellent service. Customer life cycle management can be very successful in developing loyal customers, who may be more receptive to upselling, where they purchase more luxury or expensive items, and cross-selling, where they purchase items similar to the ones they have.

For example, if a customer purchases a multi-purpose cleaner from your company and loves the product and the experience, they may be more likely to purchase a glass cleaner or a sponge from your company as well. If they enroll in a subscription service to refill their cleaning products, they may be more likely to upgrade to the deluxe package if they enjoy their service.

Related: Customer Loyalty vs. Brand Loyalty: What's the Difference?

How to manage the customer life cycle

These are some steps you can follow to manage the customer life cycle in your business:

1. Identify your target client or customer

When implementing a customer life cycle management plan, it's important to understand your target audience. Consider which people may benefit more from your product or service, or who may be most attracted to the value you offer. When you begin your marketing plans, consider the problems your potential customers have and explain how your product can help solve them.

2. Gather and track consumer data

An important aspect of the customer life cycle management plan is gathering and tracking consumer data. To make the best adjustments to your process, you want to understand what customers are responding to and what they have feedback about. By running surveys and gathering data you can track the success of your campaign.

3. Produce genuine and engaging content

When the potential customer visits your website or finds your social media content, you want to provide genuine value. Focus on content that resonates with your target audience and maintain a consistent publishing schedule to stay relevant in search results.

4. Offer excellent customer service

Customer life cycle management strives to retain customers by optimizing every part of the customer experience. Because of this, customer service is a very important. By evaluating your current customer service and identifying areas in which you can improve, you may increase your customer satisfaction and keep more customers.

5. Implement an efficient purchase system

Removing obstacles from the purchasing process makes it more likely that the customer makes a purchase. Implementing an efficient purchase system is one way to remove these obstacles. Ensure your purchasing page is fast and reliable, and provide a privacy policy that can make customers feel more safe using your site to make purchases.

6. Offer incentives for referrals

Once your customer reaches the retention stage of the customer life cycle, consider offering them referral bonuses for encouraging their friends and family to become customers as well. Your loyal buyers can very effective marketing tools by pursuing referral bonuses and earning you more customers and profits.

7. Encourage loyalty enrollment

Loyalty or rewards programs are systems in which you reward customers each time they make a purchase with your company. For example, if you are a manager for a bakery, you may implement a loyalty program so that buyers receive a point for every dollar they spend. Once they've accrued 100 points, they receive a free treat. This might make customers more likely to return to your bakery than go to others.

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