Hundreds of thousands of brands exist worldwide, and they are all fighting for consumers' attention. Whether you're a SaaS platform, travel company, or fashion brand, you know that grabbing that attention is only half the battle.
The customer journey spans many touchpoints across the awareness, consideration, and decision phases, leading to retention and loyalty considerations — both crucial concerning long-term success. After all, overall profitability can increase by 25-125% when your churn rate is reduced by just 5%.
To achieve this, one key strategy is tough to ignore — lifecycle marketing. When you nail a lifecycle marketing strategy, you can send your target audience the right marketing messages at the right time. Once you land a new customer, you work toward keeping them.
The secret ingredients?
Real-time data, personalization, and marketing automation. That's often the winning combination. Let's dive deeper into this trending strategy, focusing on what it is, why it matters, and the next steps.
Lifecycle marketing: what is it?
Lifecycle marketing involves a combination of strategies used to influence customer behavior. These strategies focus on the varying touchpoints throughout the marketing cycle, moving from the initial interaction between a prospect and your brand to the development of brand advocates.
Put simply — lifecycle marketing involves relevant, timely communication with buyers based on their lifecycle stage.
Throughout this cycle, there are various stages. Some businesses focus solely on acquisition, retention, and loyalty. However, these stages can be broken down into several phases and involve different considerations based on a brand's business model.
- Awareness is when customers first learn about your brand. This stage is your opportunity to capture the attention of prospective customers. This stage is based on a customer's problem or need.
- Engagement or intent involves an interaction between potential customers and your brand — for example, people subscribing to your mailing list, following you on social media, or checking out your website.
- Evaluation is all about decision-making, so you must provide customers with the information they need to choose your brand confidently.
- Purchase is when a prospect officially becomes a customer. At this point, your goal is not to promote your brand but make it easy for people to buy.
- Support means investing in customers post-purchase. Follow up to ensure customers are satisfied and maximizing their purchase.
- Loyalty is when customers become advocates for your brand — they're happy and willing to spread the love. Nurture those in this stage to retain them as customers while benefiting from new buyers.
This process is called the customer journey — from the awareness or acquisition stage to the customer loyalty stage.
Boosting campaign ROI with lifecycle marketing
There are many benefits associated with lifecycle marketing, including an increased return on investment (ROI). For example, if you invest in paid channels, you want your messaging to be as relevant and timely as possible to encourage higher conversion rates. With lifecycle marketing, you gain insight to craft personalized customer communications and boost your overall ROI.
To ensure success throughout these cycles, you must develop strategies for:
- Data analysis
These three key ingredients are unique yet still reliant on one another. For example, improving personalization and automation without optimal data analysis is challenging — achieving this step at scale can be particularly difficult. For this reason, investing in advancing technologies and associated capabilities are crucial, ranging from AI-driven optimization to predictive marketing analytics and customer modeling.
How does lifecycle marketing differ from traditional strategies?
Traditional marketing efforts can be effective under the right circumstances. However, they do not accurately model the modern customer lifecycle. For example, the traditional sales funnel takes a linear approach. The issue is the modern customer's journey doesn't move in one direction, which is recognized in lifecycle marketing. This approach makes the customer the primary focal point, factoring in their experiences from the beginning until the end.
So, while a traditional sales funnel involves overlapping stages, lifecycle marketing is more about the customer — not the sale. This strategy is used to help brands strengthen the customer experience to encourage greater retention and brand loyalty.
This new, trending framework is about giving your audience what they want and need as they move through the customer journey. For these reasons, lifecycle marketing tends to be more accurate and is better aligned with trust-building and lead nurturing. The relationship is fairly straightforward — revenue increases when businesses convert and retain customers. This relationship is the core difference between a traditional acquisition funnel and lifecycle marketing, as the latter considers prospects and customers far beyond the initial acquisition stage.
Instead of just boosting revenue, you can significantly increase customer lifetime value (LTV) with lifecycle marketing.
Developing a customer lifecycle marketing strategy
No two customers are equal concerning their history with your brand, buying behavior, expectations, etc. Some customers will visit for the first time, while others become frequent buyers. Lifecycle marketing leverages the customer lifecycle to ensure personalized, relevant value and messaging throughout each customer's journey.
So, where do you begin to create a customer lifecycle marketing plan?
First, there is no one-size-fits-all strategy for lifecycle marketing or any other marketing-related approach. Lifecycle marketing varies for different brands. The key is meeting your customers where they are and creating personalized messages that convert. So, you must first begin by understanding and mapping out the customer lifecycle as it applies to your business.
Focus on any issues or friction within each stage so that you can brainstorm solutions. When you spot problems, you can implement them into your lifecycle model.
Break down your entire lifecycle marketing strategy into relevant stages and create specific milestones — then bring them all together into a big-picture plan. This plan could include personalized marketing automation linked to triggers, segmentation, and omnichannel marketing.
Sample strategy for e-commerce brands
While not all companies use the same approach concerning the associated lifecycle stages, there is plenty of overlap. What makes the most sense for your brand is crucial and matters concerning your approach and messaging. For example, if you're an e-commerce brand, your stages may look something like this:
- Anonymous site visitors kick off the initial awareness stage. Your goal is to convince these visitors to take action — whether to make a purchase or register. Offer first-time purchase discounts via pop-ups that use the information you have. For example, provide an offer based on the pages visitors browse. You can also level up your SEO game, launch a paid search campaign, and run social media ads — like TikTok ads.
- Known or returning visitors further support the acquisition stage. The more data you have, the more personalized you can make your messaging, increasing your chances of engagement. This phase is a great time to send browse abandonment emails.
- Registered users who take action (e.g., sign up for your newsletter) but have not yet bought represent those with intent. You can send messages that nurture these leads through email marketing and retargeting. Focus on what you know — how did these visitors find your site, where do they live, and what products are they looking at? To encourage conversions, offer data-driven promotions and flash sales, share personalized product recommendations, and target cart abandoners.
- First-time customers represent those in the purchase stage and often need a nudge to make another purchase. While many first-time buyers will not make a second purchase, those who do will often make a third, and with each purchase, these buyers move closer to becoming loyal brand advocates.
- Active and frequent customers require support to encourage customer retention — for example, you can provide personalized messages to reassure buyers they made the right decision and offer customized rewards. Here, you'll want to focus on recency, frequency, monetary (REM) segmentation, and other crucial KPIs to pinpoint those at the greatest risk of churning.
- Brand loyalists share your social content, recommend you to others, etc. Acknowledge these customers. On average, 80% of profits come from 20% of customers, representing the most loyal consumers! Offer them special perks, like free shipping, loyalty programs (i.e., points for every dollar spent), incentives to review products, etc.
There are also phases involving risk-of-churn, churned, and reactivated customers. However, determining who these customers are can be more challenging, especially if you do not have accurate data.
The link between lifecycle marketing and data
With lifecycle marketing, you benefit from data-driven decisions — but only when using data correctly. When you have access to relevant, accurate data, instead of making assumptions, you can review the data available to measure your successes (or failures). This data is needed to profile and predict where customers are within the lifecycle, providing provides intel on engagement level, lifetime value, spending habits, etc.
Customer lifetime value is one of the most crucial KPIs within any lifecycle marketing strategy, as this approach largely focuses on retention. After all, retaining a previous customer is much more cost-effective than trying to acquire a new one. Depending on your industry, research shows that acquiring new customers can cost five to seven times more than retaining existing customers. As you look at vital KPIs, like LTV, you will better understand your customers and what changes you need to make.
Other KPIs to consider, depending on your industry and overall strategy, include:
- Number of new customers
- Click-through and unsubscribe rates (for email campaigns)
- Number of returning customers
- Customer acquisition costs
- Return on ad spend
- Revenue per visitor
- Conversation rates
- Retention rates
- Adoption rates
- Usage/purchase frequency
- Advocacy KPIs (i.e., net promoter score and customer satisfaction score)
Discover more: 2023's top marketing KPIs explained
Invest in the right tools to optimize your lifecycle marketing strategy
Data is the foundation of successful lifecycle marketing campaigns, but only when that data has context. Without context, it's meaningless or misleading. Typically, the more data, the better. But that's not always the case. If you don't have the tools and systems to understand your data, the more data you accumulate, the more overwhelming it becomes.
To address this concern, you must invest in solutions that ensure quick, confident decisions based on more accurate, unified insights. The ability to make sense of your data means that you will use it as a source of value instead of stress.
Leveraging real-time data is a game-changer when aiming to improve your bottom line. For example, the ability to access real-time data from Salesforce could mean the difference between gaining vs. losing a new customer or converting a first-time buyer into a loyal customer vs. a churned customer.
So, by investing in the right tools, you can significantly boost ROI with minimal effort. These will allow you to use the available data correctly — extracting the metrics you need to propel your business forward.