Doing the Level 3 Digital Marketing Apprenticeship but can’t quite grasp what the customer lifecycle is and how it works? Well, you’ve come to the right place. In this blog we’ll be discussing the in’s and out’s of the customer lifecycle and how it is applied in a business. This is in accordance with the technical knowledge requirement from the Level 3 Digital Marketing Standard which requires an understanding of the customer lifecycle.
Introduction to the Customer Lifecycle
As a consumer, the relationship with a brand typically starts after you’ve purchased a product from them, but for that business, the steps leading up to your purchase from them would have been well planned. From a business perspective, having a consumer sign up for an email newsletter, visit their website, or even just be aware of their brand is a big step towards developing a relationship with the consumer. Each of these actions is a step in the customer lifecycle.
The customer lifecycle, put simply, is the progression of potential customers learning about a product, buying it from a company, and ideally, purchasing again in the future, maybe even telling a friend about the brand. Reach, Acquisition, Conversion, Retention, and Loyalty are the five steps that make up this process and we will be discussing each of these steps in detail and how they fit in the marketing spectrum too.
Reach
This initial stage is when you get in touch with a potential customer for the first time. This can happen through a social media ad they may have seen on their timeline, for example. In order to ‘Reach’ the right people, you have to be advertising in the right areas and ensure that your audience aligns with your companies target audience.
It’s essential that you have the right campaign objectives in place to determine which of your marketing campaigns was most successful. For example, in Paid Social Media marketing, this is tracked through impressions which are counted every time a user sees an ad.
However, at this stage, it is unlikely that the consumer will become a paying customer. The main objective in this stage is to grab the attention of potential customers and start building a relationship with them.
Acquisition
Your potential customers will enter the acquisition phase as soon as they notice you. Sending customers to your website in the hopes that they will become subscribers or purchasers is the main objective of this stage.
It’s critical to realise that the majority of visitors to your website will do it with a specific need or want in mind. Based on which acquisition channel the customer has used, this step will look different. For example, if a consumer has seen a social media advertisement and clicked on the link, it is essential that the link directs them to the right landing page where you are providing them with the ideal goods or services to meet their demands and directing them on how to use them.
It won’t matter whether you have reached potential consumers if you aren’t providing them with relevant content that they are looking for. By understanding your business, what you sell or services that you offer and the consumer that will purchase them, will help you with this stage of the cycle.
Conversion
The potential customer takes action after gathering all the essential information and being satisfied with their interaction with your brand. They’ve converted successfully and are now one of your customers.
It’s crucial to remember that depending on the product or service you are offering, conversions can look different. An e-commerce store’s definition of a purchase, for instance, would be “buying a product.” For a hairstyling business, however, it would be to schedule a hair styling appointment.
Focusing on delivering value and developing the relationship over just selling the goods is the greatest method to turn leads into paying customers. If your customer feels welcomed and appreciated, the transaction will happen naturally.
The cycle doesn’t stop here, though. Every profitable company is aware that business involves more than just executing a single transaction. The best businesses develop relationships with clients that are win-win and increase customer lifetime value. In other words, they make sure that their clients will remain with them for a while. This is known as customer retention.
Retention
Your objective now that you have a new customer should be to determine how to keep them as a regular customer. This involves figuring out how to sell other products or services to the customer.
You have to keep preserving and establishing your relationship with your customer at this stage, this means keeping in touch with them and continuing to provide some form of value to the customer so that they remember you when they require a particular product or service which you offer.
This can be done through regular communication, such as e-mail marketing, perhaps involving discount codes or promotional offers. By offering unique perks to them, it will make you stand out amongst your competitors who may be offering the same service.
Loyalty
The main objective of the customer lifecyle is to transform your customer into a friend or follower who purchases your product or service often and may even propose your brand to their family or friends, thus gaining you more customers.
Inevitably, not every customer would reach this stage but using the customer lifecycle, you can acquire more. If you’re noticing minimum people reaching this stage, it would mean you need to re-evaluate the other stages of your customer’s lifecycle and see where you may be lacking as brand loyalty doesn’t come from no-where, it must have been influenced from the other four stages.
Conclusion
In conclusion, the customer lifecycle is a powerful tool that can be used to improve your marketing strategy and identify any flaws in your consumers’ journey from awareness to conversion and beyond.
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