How to seize the potential of the customer lifecycle - Richard Boyer
How to seize the potential of the customer lifecycle – Richard Boyer
The key to successful relationship marketing lies in regular delivery of relevant content, no matter where the customer is within the lifecycle. In other words, you need to keep your company and products in a customer’s consciousness, by delivering something that they want to read, when they want to be reading it. How can I manage that, you ask? It is only achievable in a scalable way through:
- Effective customer segmentation
- Relevant content, and
- Efficient automation of your activities
By customer segmentation, I am mainly referring to the path a customer takes from their first contact as a prospect, moving on to the first purchase, and continuation to a repeat purchase customer. Along this journey, there are many opportunities to communicate with the customer, and provide information that helps to move them along the path. The customer lifecycle should be viewed holistically so as to not place too much emphasis on a particular stage in the journey and thereby missing possible revenue opportunities along the way. If you take a look at the chart below, you’ll see that three of the four classic stages in the customer lifecycle involve active customers.
Which customers are most valuable?
Three of four classic stages involve active customers. This is significant, as it points to the importance of retention activities. On average, the lifetime value of a repeat customer is 4.8 times that of a one-time buyer. That is huge, and should immediately trigger thoughts of cross selling and up-selling activities. Effective cross and upselling is trial and error based, and is typically maximized through experimentation. The use of recurring filters to identify different customer types and sub-segments helps to simplify your customer engagement and perfect your call to actions, which in turn leads to optimal add-ons or upgrades.
Marketers turn a blind eye to churn
All this talk about retention, does not mean that acquisition activities should be completely ignored, it just helps to illustrate how the classic marketing approach of focusing investment on “saving the base” has a very real statistical foundation. The acquisition of a customer often begins with their registration to a website or newsletter, and a welcome email for new customers is probably obvious to most, but according to a recent study, less than 50% of email marketers are using automation for this scenario. This is the first step in relationship building, and a double opt-in verification (did this person really register to receive email from me?) combined with a follow-up welcome mail is crucial for setting the customers first impressions and getting the marketing ball rolling.
Make marketing a conversation
Timing is everything is a common phrase, and in lifecycle marketing, the phrase also holds true. It is critical to communicate to your customer at the correct time. This is only truly possible via automation. There are examples of activities, such as sending a simple monthly newsletter, where the automation advantage is not significant, but in most situations the customer triggered events should drive an automated response. Things such as clicking on articles in a newsletter, extensive time being spent on your website, or the customer placing things in the shopping cart, but not completing the purchase are all good examples of customer-driven behavior that should lead to an automated activity.
Optimize and automate
Automated programs should constantly evolve based on the responses of the customers in order to maximize their effectiveness. It’s convenient to create a program and then sit back and relax, but is this the best method? There’s nothing worse than to continue to send an ineffective email to an ever diminishing list of contacts. The key is to keep it fresh and optimize. With automated programs it is very easy to set up A/B split testing to gauge the effectiveness of almost every aspect of a program. You can test the email format, timing and ROI of an incentive vs. no incentive, and automatically use the more effective branch. With testing you are able to identify if it makes sense to provide coupons or incentives in specific scenarios, and is a key to maximizing the ROI of campaigns.
Got comments? We’d love to hear them below, or tweet @Emarsys. Interested in running your own lifecycle automation programmes? Get in touch today.
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