The relationship between a customer and a business typically passes through a series of stages which describes the “customer lifecycle.” At each stage in the lifecycle, the customer requires something different from the business, which in turn, must respond appropriately. Similarly, at each stage the business has opportunities to develop the relationship and increase the lifetime value of the customer. Let’s discuss each of the major milestones within this lifecycle. The following graphic illustrates this ongoing process.
- Introduction: a prospect is persuaded to become a customer of the company. In the early stage of the relationship, the customer may be unprofitable because of significant acquisition costs (such as advertising, back-office processing of application forms), significant support demands, and low cost introductory offers to attract them in the first place.
- Growth: as the relationship progresses, the customer becomes profitable, but only marginally. They may still be very price-sensitive and have relatively few products.
- Mature: when the customer accepts the business as part of his or her life, the business makes the majority of its profit. The customer is often willing to pay a premium if they are very satisfied with the service. The goal of business is to elongate this stage as far as possible.
- Decline: the decline stage is not inevitable but always threatens companies that do not service their customers’ needs adequately and face competitors who claim they can do a better job.
- Segment your customer base based on customer lifecycle in your CRM system.
- Set different KPI thresholds for each stage. Allow for additional talk time on a prospective customer and define SLA for each stage of the customer lifecycle.
- Measure Net Promoter Score throughout each stage of the lifecycle and take action when NPS is out of band for each stage.
- Monitor social behavior during the customer lifecycle.
- Keep Customers Informed (KCI strategy) about issue resolution, order status or complaint resolution.
- Train your employees to recognize signs of customer progressing to another stage
- Use analytics to build contact routing rules and next best offer rules and match customer with the right agent based on lifetime value and stage
The CRM-age has given us methods of retaining tremendous information about our customers and marketing has been using this data to its advantage to better understand customer (buying) behavior. Ultimately, this data becomes a great opportunity for Customer Service operations to align the Customer Experience strategy based on this wealth of information.