Customer success professionals can – and have – written thousands of articles about the customer lifecycle. From best practices to lessons learned, we are constantly challenging ourselves to deliver value throughout the customer lifecycle with more efficiently, scale, etc.
But what exactly is it, and what are the stages?
The customer lifecycle is most often used as a way to explain how businesses manage their customer relationships. It is cyclical and involves several stages before, during, and after the customer transaction. In recurring revenue businesses, there is no single customer transaction, but rather a longer-term relationship that will last as long as the business is able to deliver value to the customer.
While there are several stages throughout the customer lifecycle, the most important stages for customer success teams are post-transaction and usually include: Onboarding, Nurture, Renewal, and Expansion.
Onboarding
This stage of the customer lifecycle comes right after the transaction and ends once the customer is able to get to first value. This is an important time to build a strong relationship with the customer, provide necessary training, and manage any necessary technical integrations. Onboarding is critical because it establishes the relationship between you and your customer, and can set the tone for a long and successful relationship.
Quick Advice:
- Make sure that your onboarding program is proactive. By providing the necessary resources and tracking your own progress, you are setting up your team for success.
- Focus on time to first value. Your customer wants to experience the value they were promised, and you need to make sure they get there as efficiently as possible.
Nurture
The nurture stage is also known as the adoption or growth stage of the customer lifecycle. In this stage, it is most important to deliver valuable customer engagements that are helping your customer achieve their goals. This might include behavior-based email reports, additional user training, and escalation management when things go wrong. Focus on monitoring your customer activity and creating programs that can help segments of customers become more successful.
Quick Advice:
- Make sure your customer success managers are prioritized and focused. There are too many activities you can be doing for each customer. Monitor customer activity and create early warning systems to get important issues at the top of your priority list.
- Deliver relevant, personalized email engagements to customers and they will continuously come back to your product or service.
Renewal
The customer renewal stage is where a customer will have the opportunity to decide whether or not they will continue to use your product or services. Usually, this will come at the end of their contract or trial period. The most important aspect of this stage is to remember that customers are investing – not spending – on your product and they expect positive business outcomes. Well-communicated outcomes supported by customer data always create a winning strategy.
Quick Advice:
- Make sure the renewal is not the first conversation you’ve had with the customer around business outcomes or ROI. It should be a review based on several earlier conversations.
- Support every claim you make with real customer data. Product consumption, account, and revenue data all help strengthen the case to renew.
Expansion
Expansion, upsell or cross-sell opportunities, can happen at any point in the customer lifecycle. Identifying which customers are potential opportunities requires an understanding of product consumption across your entire user base. If your customers are considering investing more in one product or using more of your products, make sure you are building programs that support them through the transition.
Quick Advice:
- Product consumption is a great indicator of expansion opportunities. Reach out to customers that are reaching high levels of usage to see if greater opportunities exist.
- The conversation around expansion might start with customer success, but it is best practice to handoff to sales to handle the transaction negotiation.
If you’re ready to build a proactive customer success team and gain more predictability throughout the customer lifecycle, schedule a demo with Totango today!