Customer Lifecycle Management

Let's begin with answering: what is Customer Lifecycle Management? The customer lifecycle is a term used to describe the various stages a customer goes through with a company.

Definition of Customer Lifecycle Management

There is no standard definition of Customer Lifecycle Management. If you Google for 'Customer Lifecycle Management definition' you will get different results. There is no standard definition because each marketer has his own take on what constitutes a customer lifecycle, where it starts, and where it ends.

Customer Lifecycle Management Meaning

In the absence of a definition for CLM, let’s understand what Customer Lifecycle Management means. The customer lifecycle is a term that describes the different stages a customer goes through in its association with a company. It starts with the first time the customer hears about a company and continues till she uses the product or services.

The lifecycle can be broken down into five distinct stages as shown below: Discovery, Education, Purchase, Post-purchase engagement, and loyalty or advocacy.

At each stage, the customer needs and behavior varies. The idea behind CLM is to understand the customer’s behavior, predict her needs, and then prepare a plan to cater to these needs.

Life cycle management is not just a buzzword. More and more businesses are realizing the benefits of CLM and how it helps them understand customers’ needs, their behavior and help cater to them. From helping businesses create a detailed buyer persona, upsell and cross-sell to cultivate brand advocacy- lifecycle management helps businesses in several ways.

Customer Lifecycle Management is more important today than ever. The proliferation of smart phones and digital technologies has given birth to a new customer. One, who is informed, wants personalized experiences and is ready to shift brand loyalty if her expectations are not met. The key to impressing the new customer is to be proactive and personal. That’s where CLM comes in and provides you with data to get a 360-degree view of the customer.

Benefits of Customer Lifecycle Management

CLM offers several key benefits to businesses including-

• Drives sales and profitability by helping you upsell and cross-sell based on a customer's needs.
• Helps your sales and marketing team in predicting customer needs and catering to those needs at the right time.
• Helps your business to focus on delighting the customer at every touchpoint.
• Provides data and insights to build a stronger sales pipeline, personalize customer experiences, and run precision marketing campaigns.
• Provides customer data for process improvements, and drive collaboration across the organization.
• Empowers your customer support team with rich information to resolve issues faster and enhance satisfaction.

Many people confuse CLM and CRM. It can be really tricky as both CRM and Customer Lifecycle Management appear similar on the surface.

CLM and CRM both deal with customer data. Both also help sales and marketing teams in their various activities like lead management, customer segmentation, customer engagement, and email automation, etc. But CLM and CRM are different as they provide different values to a business.

CRM vs CLM- The Difference

The core focus of CRM software is to capture customer information and leverage it to build a relationship with the customer. The customer data can be used to personalize customer experiences and convert her from a prospect to a customer.

The core focus of the CLM, on the other hand, is to take a comprehensive approach towards a customer. It tracks a customer from her first engagement with your business and continues till she stays with your brand. The CLM software captures data around a customer’s lifecycle stage, her needs, and pain points at the stage and helps you meet them.

A CRM helps you build relationships with your customers whereas a CLM helps you leverage that relationship to get repeat business, referrals, and brand advocacy.

Many people often ask if a CRM can help in Customer Lifecycle Management. There aren’t many CRMs that can also do CLM but all CLM software have the capabilities of a CRM.

A CLM encompasses the entire business operations and aligns it with the lifecycle of customers whereas a CRM is limited to converting a prospect into a customer and building a relationship with them.

So, it is not possible to do Customer Lifecycle Management with a CRM.

Applying analytics across the customer lifecycle helps businesses to identify opportunities to extend the customer’s lifetime value and encourage value-generating behaviors. It helps businesses acquire more profitable customers through detailed buyer personas, granular customer segmentation, targeting, and reduces the cost of acquisition, drives cross-sell and upsell, and increases the lifetime value. Forrester has identified key customer analytics techniques-

Analytics Across The CLM

The above graphic tells you the various analytical method that can be used at each stage of the customer lifecycle-

• Discover- At this stage, use analytics to get a deep understanding of customer needs and buying motivations. Start with segmentation to get a 360-degree view of the customer. Segmentation will help you across the lifecycle-right from acquisition to retention. You can then use lead scoring to evaluate your prospects into high/medium/low and create specific programs for each lead category. This will help you allocate efforts and resources based on the profitability of prospects. Customer look-alike models are an excellent way to reach prospects with higher potential to convert. It helps you improve the results of your marketing campaigns and the ROI.
• Explore- In this stage of the life cycle, your customer is exploring his brand choices. Use offer-optimization techniques to match the appropriate offer based on past customer responses. The marketing mix model will help you understand the impact of various marketing channels and prioritize your investments on channels that are delivering better returns. You can use A/B and Multivariate testing to find the effectiveness of your marketing message and copy.
• Buy- At this stage, start with propensity models to predict future events. You can also up-sell and cross-sell to increase the cart value. In-market timing models will help you in reaching potential customers and narrows the prospect universe to those who are actually shopping for a product.
• Use- As the customer starts using your product or service, you need to know how far you’ve met her expectations. Product and recommendation analysis help you understand the association between various products your customers buy. Sentiment analysis will help you understand the positive/negative experience of the customers by analyzing their social media posts, interaction with customer support, and other data.
• Ask- Analytics at this stage will help you understand the levels of customer engagement and satisfaction with the product or service. Engagement analytics will help you understand the drivers and channels of engagement. Voice of the customer (VoC) analytics will help you hear and listen to customer feedback and extract insights from it.
• Engage- At the Engage stage, you would want to drive brand loyalty. You can use churn models to detect early signs of defection. Next-best-action models will help you personalize customer experiences to enhance satisfaction. Customer lifetime value (CLV) models will help you understand the future worth of the customers and accordingly allocate resources to them. By using location analytics, you would be able to contextualize the customer experiences as well as make highly relevant offers. Loyalty analytics will help you measure the depth of your relationship with the customers.

To effectively manage the customer lifecycle and gain benefits from it, it's necessary to define and understand the real Customer Lifecycle Management KPIs that should be monitored and measured across the lifecycle.

Key Customer Lifecycle Management Metrics

Many businesses make the mistake of picking website and social media metrics to measure the performance of their CLM. While these metrics are indicators of your performance, most of these highlights the effectiveness of your marketing, not the CLM. a successful CLM program should convert into more business, more valuable purchases, higher retention rate, and active brand advocacy. Here are some real Customer Lifecycle Management metrics you should monitor-

• New & Repeat orders: How many new customers are you gaining? How many existing customers are continuing their subscription or placing repeat orders or buying again from you?
• Upsells: Are customers upgrading their choices?
• Cross-sells: Are customers buying other relevant products from you?
• Usage: Are customers using your product or is it left unused? How frequently?
• Churn: How many customers are abandoning the product or service?
• Retention: What percentage of your customers are you able to retain?
• Loyalty: How many customers are recommending your product/service? How many are recommending your company on social media?
• Advocacy: Are your customers writing positive reviews about the product/service? How many are referring to their friends and family members?

Many businesses find CLM to be easier said than done. Here are some common challenges in Customer Lifecycle Management you may face-

• Defining your brand strategy- You must clearly define your brand strategy before orchestrating your CLM process. What separates you from your competitors? What voice best reflects your brand attributes? Start with defining your brand.
• Setting CLM objectives- Should be easy, right? Many companies struggle to set goals for their CLM process. The best way is to start with a few, max 2 to 3 objectives and as your CLM processes mature, add more to it.
• Making sense from cross-channel data- While companies have gained significant capabilities to collect data from multiple channels, they struggle to make sense from it. You need to organize and centralize all your data and then facilitate it to flow across the organization on a need basis. A CLM platform can help you do that in an efficient way.

• Multiple customer touchpoints- Customer journeys are complex in the digital age. It is tough to follow a customer on all the channels as she shifts from one device to another and from one touchpoint to another. Identify key touchpoints and journeys that align with your CLM objectives and focus on them.
• Managing Customer Experience- The way you react and respond to customers influences their perception of the brand. And that’s why it is important to choose the right response to ensure you meet the customer’s needs.
• Measuring the performance- A common challenge faced by businesses orchestrating CLM is to measure its effectiveness. Many companies struggle to identify the right customer lifecycle KPIs. We have discussed key KPIs for CLM in this post. The trick is to identify KPIs that best align with your CLM objectives. For example, if brand advocacy is your objective then you should monitor customer reviews, referrals, and recommendations.

A good Customer Lifecycle Management platform will make it easy for you to orchestrate and manage your CLM process. However, selecting the right Customer Lifecycle Management software is important as the success of your CLM process will hugely depend on it.

Selecting A Good Customer Lifecycle Management Software

Here’s what you should look for while selecting a Customer Lifecycle Management system-

• Must help you manage your entire lifecycle: A good CLM software should cover your entire business operations- right from sales, marketing, billing to customer support. This will help you get customer data and understand their needs across all the stages of the life cycle.
• 360-Degree Customer View: A 360-degree view of each customer’s journey helps you better understand customer needs, use the data to personalize experiences, identify customers who are defecting and prioritize engagements.

• Customer Segmentation: The software must allow you to group your audience based on various attributes so that you can design personalized campaigns and experiences for them. This will give you the ability to tailor messages, timing, and content, etc., to enhance customer experience and satisfaction.
• Behavior Tracking: A good CLM must consolidate customer data from different sources and help you use it to personalize messages, run event-based campaigns like cart abandonments.
• Multichannel Engagement: The Customer Lifecycle Management system must facilitate engagement across multiple channels, including mobile phones, email, website, and social media. You need to be able to reach your customers where they are for more effective life cycle management.
• Native Integrations: The CLM software must provide support for native integrations with 3rd party business systems and apps such as accounting software, email, project management, and communication tools to help you connect your existing software with the CLM system and optimize your processes through automation.

ConvergeHub, our Customer Lifecycle Management software is designed for SMBs to design and orchestrate their CLM process. It helps you manage your entire business operations and manage your CLM from one single platform. Powered with advanced digital and data technologies, ConvergeHub offers powerful sales automation, precision marketing, enhanced customer support, and automated billing and payment tracking features. The bouquet of features helps you not only understand your customers better but also meaningfully engage with them at various stages of their lifecycle, personalize their experiences and nurture them towards brand advocacy. Click here to know more about ConvergeHub.