Customer Lifecycle Management

Customer Lifecycle Management (CLM) analyses various stages of the customer journey and assigns metrics at each step to measure their relationship with the business. 

It is very important for businesses to build long-lasting relationships with their customers. However, even after providing amazing services, most businesses are still unsure whether all their customers are satisfied or not. 

So, how can businesses make their customers stay with them and not move to their competitors?

This is where customer lifecycle management comes in. 

Customer lifecycle means studying the different stages of customer behaviour when considering purchasing a product or service to actually buying it. A closer study enables the business to gain valuable insights into different customer behaviour patterns. Businesses can also better equip their marketing, sales and customer service teams to convert one-time buyers into long-term advocates by analysing the customer. 

There are 5 stages: Reach, Acquisition, Conversion, Retention and Loyalty

It analyses various stages of the customer lifecycle and assigns metrics at each step. Then their performance is measured based on the behaviour of these metrics. Most of the customers generally follow the same pattern when they are searching for products or services based on what they currently need or want. In this stage, businesses may guide their customers by providing details about the essential features and uses to help ease customer efforts, bring transparency and build trust.

Why is Customer Lifecycle Management important for businesses?

CLM helps businesses analyse a customer’s journey from the moment they are introduced to a business. 

Let’s try to understand how these are important for businesses, and how they can benefit.

1. It empowers businesses to survive in cut-throat competition

Businesses can provide personalised and exclusive services to their customers throughout their complete lifecycle with the help of CLM. As a result, they can understand their customers and their needs, and better engage with them increasing their experience with the business. 

Because of the data generated through CLM, businesses can try to understand their customers, their buying behaviour, their unsatisfied needs, and expectations. In turn, businesses can aim to resolve customer concerns to achieve customer satisfaction. 

CLM allows businesses to understand their customer experiences on products and services by engaging with them at various phases of the customer lifecycle journey. This information aids businesses in developing different strategies and policies to meet their customers and in return, customers become reliable at all stages of their journey and switching to a competitor becomes a distant option. 

It empowers businesses to identify every customer’s needs and expectations. If not, then the business can plan out ways to cater to every customer’s needs and feel acknowledged as a person of value. 

2. It helps to simplify operations

Businesses have a massive amount of data that often overlap with one another. CLM assists businesses in reorganising all the information into a central spot where marketing, sales, finance, purchase, and all departments can all access it and collaborate with each other to accomplish the overall goals of the business.

It streamlines the procedures, raises visibility, improves efficiency and productivity, and allows a business to be more firm in their entire operations. It can eventually help them in outplaying their competitors. 

3. It allows businesses to upsell and cross-sell

Customers sometimes scale up or scale down their shopping, or even change their buying patterns. With the help of a CLM, businesses can identify these customers and offer them the latest buying plans. Businesses may also reach out to customers proactively and offer them consumables for products bought earlier. 

4. It can help minimise churn rate

The churn rate is the number of customers who have left the business during a period divided by the total number of customers at the beginning of that period. Businesses need to monitor the churn rate consistently and always strive to minimise it.

Businesses are better able to understand their customers and build trust and loyalty among them with the help of CLM. As a result, it increases customer retention – even a small percentage of reduction in churn rate will bring more revenue. 

5. It increases the value of the assets over time

CLM contributes to the extension of the customer relationship lifecycle by increasing the likelihood of creating a more engaging interaction between the business and the customer. During the lifecycle, customers interact with a brand over an extended length of time where both the brand and customers become dependable on each other. 

Engagement over a long period between the business and customer allows for the formation of strong bonds. Empathy, transparency, proactive attitude, and supporting the client wherever and whenever feasible throughout the customer journey are the foundations of effective customer lifecycle management. 

5. It aids in the communication of product value

Businesses may connect with the customers at different phases of the customer lifecycle with correctly organised data through the CLM. Every customer requires personalised communication with the business since they have varied demands and objectives while making a purchase. It will benefit the business in developing long-term relationships with their customers and providing them delightful customer experience. 

To ensure customer satisfaction, businesses need to understand their customer relationship cycle, to ensure suitable strategies can be created to expand the customer base with a minimum churn rate. 

The simple truth for businesses is to remember that they’re in a business where customer satisfaction is of great importance. When they assist their customers in overcoming challenges and fulfilling their needs with the brands, they will run their businesses more efficiently and effectively. 

About the author:

Sukhdev Singh is a Digital Marketing Executive at Maxicus.