How to Use Customer Lifecycle Management (CLM) to Your Advantage

Have you sent out another blanket email campaign to your customers, only to receive a tepid response?

It’s time to customize your client interactions for a more robust relationship with them. It’s time to master Customer Lifecycle Management (CLM).

If you feel you have only a vague understanding of ‘Customer Lifecycle Management’ or ‘Customer Lifecycle Marketing’, you’re not alone. CLM is a concept that can help your business optimize interactions with your customers.

The ultimate goal is not just customer retention but customer loyalty.

Customer Lifecycle

Your customer goes through different phases while working with you. And the ‘Customer Lifecycle’ describes those phases. CLM helps you to market to your customer uniquely, depending on which phase of the Customer Lifecycle they’re in.

Using CLM, you can create the kind of communication that is personally meaningful to your customer. You’ll be able to map out which campaigns work best for which phase, eliminate churn, and increase overall customer lifetime value.

Customer Lifecycle Marketing: An Approach for Modern Business

In 2000, NetGenesis and Target Marketing published E-Metrics: Business Metrics For The New Economy. In it, they described the Customer Lifecycle, and presented a graphic model which is still relevant today.

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“The Customer Life Cycle starts with reaching your target market and progresses towards an established loyal customer base” E-Metrics: Business Metrics For The New Economy

Today we find ourselves in a customer-centered economy, and internet leaders such as Amazon have demonstrated how necessary it is to gather relevant customer data so businesses can have a personalized marketing approach.

Modern businesses must adopt a more informed, personal approach to gain and keep their customers’ trust. Your next marketing campaign can be personalized and automated using certain e-commerce personalization tactics.

Customer lifecycle management can help you and your marketing team understand how to communicate with customers at each phase in their Customer Lifecycle.

Customer Lifecycle: A Condensed Example

Marketing automation software uses detailed user data to analyze and identify the phases your customers are in. These phases can be broken down further into segments, representing types of customers in each stage. (Check out a few examples of marketing segmentations you can try.)

Here is an example of the five main phases of a Customer Lifecycle:

• Acquisition
• Retention
• Increased Value
• Veneration
• Reactivation

Using an RFM analysis (recency, frequency, monetary), these phases can be broken down into 11 segments. You can supplement the lifecycle with additional segments for areas you believe are lacking (e.g. visitor segments to track their progress toward becoming customers).

Examples of these segments are outlined below. Now you can target each segment with specific campaign strategies to further your goal for each group.

The goals for the segments we’ve defined in this article are described below.

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Marketing Campaign Strategies: Segmentation Examples

Here are marketing campaign strategies for some of the different Customer Lifecycle phases, targeting specific segments within them.

ACQUISITION – Bring new traffic to the site and convince potential customers to make their first purchase.

Engaged Visitors:

• Your Target: Users who visit but don’t have any other activity.
• Your goal: Open communication with this potential customer.
• Campaign Strategies: First purchase voucher; email collection banner; promotional banner touting your site’s ‘Unique Selling Propositions’.

Loyal Visitors:

• Your Target: Users who visit AND leave an email.
• Your goal: Persuade this customer to make the first purchase.
• Campaign Strategies: Newsletter of best sellers; immediate email outlining new sales, onboarding newsletter.

RETENTION: Persuade these new customers to purchase again. First-time Customers:

• Your Target: Customers who’ve purchased once.
• Your goal: Provide excellent service and a positive interaction so they’ll purchase with you again
• Campaign Strategies: Feedback surveys with vouchers offered; email offering freebies.

Recent Customers:

• Your Target: Customers with recent but infrequent purchases.
• Your goal: Provide a positive interaction after their purchase.
• Campaign Strategies: ‘For-a-friend’ vouchers; incentives for product reviews; reminders for possible upcoming purchases.

INCREASED VALUE: Ensure your retained customers increase their purchase frequency and average order value.

Promising Customers:

• Your Target: Customers who make occasional but small purchases.
• Your goal: Entice them to spend more and/or more frequently.
• Campaign Strategies: Bundle deals; upsell using limited-time offers.

Potential Loyalists:

• Your Target: Customers who’ve spent recently, frequently, and who make larger purchases.
• Your goal: Again, entice them to spend more and/or more frequently.
• Campaign Strategies: Incentives for bundle deals; bonuses such as free shipping.

VENERATION: Make sure your most valuable customers feel that they are incredibly important to you.

Loyal Customers:

• Your Target: Customers who demonstrate loyalty by continuing to make purchases and engage with your brand.
• Your goal: Make them feel like part of the family and upsell them toward ‘Champion’ status.
• Campaign Strategies: Bonuses and personal touches such as gift vouchers, personal notes, and/or team photos.

Champions:

• Your Target: Your best customers who spend freely and frequently.
• Your goal: Make sure they know they’re an important part of your family and you value them.
• Campaign Strategies: Surprise gifts in some of their orders; pre-access to new products; ensure them the highest tier of customer service.

REACTIVATION: Lost a great customer? Bring them back into the fold. Lost a low-value customer? Spend an appropriate amount of time and resources to re-engage them.

Cannot-lose Customers:

• Your Target: Fantastic customers who no longer buy from you.
• Your goal: Do whatever you can to get them back.
• Campaign Strategies: Store credit/free products or services; reach out directly for a discussion about why they no longer purchase.

At Risk Customers:

• Your Target: Fantastic customers who have only recently stopped purchasing.
• Your goal: Quickly reach out to nudge them back into purchasing.
• Campaign Strategies: Personal note and/or small gift; exclusive deals catered to their specific business needs.

Falling Asleep Customers:

• Your Target: Lower value customers who are slipping away.
• Your goal: Keep the customer without allocating heavy resources toward them.
• Campaign Strategies: Social media reach-out; more generic but still exclusive offers.

Customer Lifecycle Management: Practical Application

Start by organizing your customer data. Run an RFM analysis to help you group your customer base into segments like those described above. Now you’re ready to create individualized marketing campaigns for each segment.

Certain tools can help you design and send your communications. Ideally, find software that incorporates all the tools you use into one program:

• Email Campaign Manager
• SMS Campaign Manager
• Push Notification Campaign Manager
• Banner Ad Campaign Manager

Optimize your workflow by automating these campaigns. Ideally, you’ll be able to move your customers along the lifecycle, from the first-time visitor to Champion, easily and efficiently.

It helps to have all of your customer profiles organized into a single customer view, so you can quickly visualize your customers’ purchase history, site activity, etc.

Make sure this data is updated frequently, or you risk alienating a customer by targeting them with a marketing campaign that doesn’t match which lifecycle phase they’re in. Ideally, your single customer view should update itself in real time.

Finally, A/B test your campaigns to make sure they work. Use testing software that is quick and relatively simple. Test your campaigns continuously, and use a control group that’s not targeted by any campaigns.

This will give you an accurate understanding of the worth of your marketing campaigns.

Get the Most out of your CLM Software

There’s no reason to build your CLM system from scratch. Look for CLM software options that are easy to use, so that you don’t need an advanced business degree to decipher your customer data.

As was mentioned before, the ideal software combines all the tools you’ll need into one program.

Anyone on your team should be able to run an RFM analysis and group the customer data into segments. Look for programs that allow you to update your single customer view in real-time, so as to avoid sending an inappropriate segment campaign to a customer.

And, find one that makes testing your campaigns easy. You’ll be able to quantify how valuable each segment campaign is, and if you need to make a change. Make CLM work for you and it will have a powerful impact on your business.

Key Points:

• Customer Lifecycle describes the phases a customer goes through.
• Customer Lifecycle Marketing describes the process of marketing to each phase.
• Lifecycle phases should be broken down further into segments, which can each be targeted by a different marketing campaign.
• Your CLM campaigns should be specifically targeted toward customers based on which segment they’re in.
• Automatically deploy your campaigns and find out which will succeed by testing them.
• Employ software that combines all the tools you’ll need into one program to create a consistent experience, and get the most value out of CLM.

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Samuel Kellett

I lead the content team at Exponea (an all-in-one marketing software, enabling personalized customer experiences at scale), where I manage the production of e-commerce articles and case studies, as well as the content for webinars and events. My passion is storytelling: I am constantly exploring new and creative ways to explain complex topics. When I’m not at my desk, I enjoy performing with my improv comedy troupe, watching films and tv, and planning my next adventure.

Latest posts by Samuel Kellett (see all)

• How to Use Customer Lifecycle Management (CLM) to Your Advantage - May 13, 2019