What Is Customer Lifecycle Management (CLM)?

Posted On June 25, 2021

Your products are awesome. Your website looks great and persuasively presents all their best strengths to the world. You can check those two crucial items off your eCommerce checklist.

But as important as that all is, it only takes you so far.

Running an eCommerce business is freaking complicated. Doing it well requires a lot of moving parts and involves learning a lot of new skills and concepts. One concept that can help you create a solid business strategy for your online store is customer lifecycle management (CLM).

What is Customer Lifecycle Management?

Customer lifecycle management is the practice of working to understand the typical customer lifecycle for your brand, and tailor your strategy to account for it. The customer lifecycle describes the different stages the customer goes through for the entire length of their relationship with your brand.

Customer lifecycle management is valuable for a few main reasons:

  • It helps you provide more relevant marketing messaging. Your marketing can be more targeted and useful to your audience if you understand where they are in the customer lifecycle.
  • It can lead to increased sales and customer retention. Translation: more money. More effective marketing means more sales, and more repeat customers.
  • It allows for better analysis of metrics. People will behave differently at different parts of the lifecycle. Understanding that allows you to assign the right metrics for the different tactics you use and analyze them more effectively.  

5 Common Stages of the Customer Lifecycle 

The details of the customer lifecycle will look different depending on the type of business you have. But in most cases, you can break it down into five main stages. 

1. Awareness

A lot of marketing tends to be focused on the awareness stages—these are all the ads and content you create to get on a consumer’s radar for the first time. Awareness is a necessary step for any of the other stages to be possible. But as important as it is, it can be overemphasized in marketing strategies in comparison to the other stages. 

2. Conversion

After you get a consumer’s attention, you need to persuade them to make a purchase. The conversion (or acquisition) stage is when they take that step to become a customer. One critical aspect of customer lifecycle management is that this big step—sometimes thought of as the main end goal—is just the second stage of five. 

3. Nurturing

Keeping customers you’ve already earned tends to yield a higher return on investment than focusing primarily on earning new first-time customers. And that’s where the nurturing stage comes in.

Invest in taking that one-time purchase and turning it into a relationship with the customer. Send follow-up emails and create marketing materials focused on how to use your products or get the most of them. Consider providing tailored coupons or offers to customers. And make sure your product quality and customer support are exceptional. 

4. Retention

Retention is when all that nurturing pays off in a customer coming back for more. For subscription products, retention rates are tied to the set intervals when a customer has the chance to renew or cancel. For other products, it means the customer choosing to make additional purchases on your website beyond the first. 

5. Advocacy

Retention’s great, but you can still go one better. Advocacy is when a loyal customer loves your products and brand so much they start talking you up—praising you on social media, telling their friends, providing case studies or testimonials. Advocacy can be earned by having a great product and providing a good enough overall customer experience. It can also be encouraged with loyalty programs and referral programs. 

How to Use CLM in Your eCommerce Strategy

Understanding CLM is one thing, but how do you put it to use in your eCommerce business? The process of effective customer lifecycle management will look different for different businesses, but here are a few smart techniques to consider to make the most of it. 

1. Create ads and content for different customer lifecycle stages.

For your marketing campaigns and content to be successful, they should answer a need or interest your audience has at the moment they come across it. That kind of relevance is key to success, and it’s part of what makes CLM so important. The prospects that are hearing about you for the first time and a customer that’s been with you for years will each respond best to messaging tailored to where they are in the journey.

As you plan out your marketing and advertising strategies, think about what people are thinking and feeling at each stage of the customer lifecycle, and create messaging to match. 

2. Keep track of your relationship with leads and customers.

A lot of putting CLM to use in practice requires actually knowing where people are in the customer lifecycle. That means keeping track of what information you can about how a person has interacted with your brand. 

While there are some legal and ethical limitations to how much data and tracking you can (or should) do, there’s still plenty of information you can reasonably collect and save without crossing any ethical lines. For example, keeping data on whether a customer has downloaded an ebook, what products they’ve purchased, what offers they’ve responded to, and their past customer service interactions—all that’s ethical, and even expected. 

This is where investing in a good customer relationship software (CRM) or other type of database is smart, to help you keep this information organized and ensure marketers and customer-facing employees can access it when needed. 

3. Personalize where possible.

The (ethical) data you collect in that last step can come in handy for this strategy. Use what you’ve learned to provide contacts with content and offers that you know are relevant to their interest. 

This can include creating segmented email lists based on the products and content they’ve shown an interest in before. Someone who has only purchased beauty products might not be interested in your new line of healthy snacks, but they’ll definitely want to know about your upcoming sale on their favorite makeup brand. 

4. Prioritize customer service.

You can have amazing products and brilliant marketing, but if a customer has a negative customer service experience with your brand, that’s it. You might as well be dead to them.

Seriously. Research from Zendesk found that around half of customers will abandon a brand after one bad experience, and 80% are done with them after two. If you want to succeed beyond the stage of conversion, you need to invest in providing consistent, effective customer service. That’s one of the most important ingredients in earning loyalty. 

5. Reward your best customers.

Loyal customers are nice. For a customer to go from purchasing your products regularly to being an advocate for your brand, you’ll usually need to go a little further than good products and customer service. Consider how best to reward your customers for their loyalty and advocacy. 

That may be instituting a loyalty program, amplifying their voice on social media by sharing their posts about your products, or sending special offers and coupons based on actions they take. 

CLM Helps You Think Beyond the Sale

Earning sales is an important goal for every business to have. Earning loyal customers will take you even further. CLM will help you think about your relationship to customers differently, and ensure you work as hard to keep their loyalty as you do to earn their initial attention and first purchase. 

Written by Ken

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