Why You Need a Solid Customer Lifecycle Management Strategy

5 min read

Customer lifecycle management helps your team build a concrete understanding of how people interact with your product throughout their journey.

Frank L.
Frank L.
Published February 19, 2021 Updated June 20, 2021
Customer Lifecycle Management

People interact with your brand across a number of different channels—each one its own unique kind of experience. As channel preferences shift and evolve, the customer journey gets more complex. To refine that experience, you need to adopt a customer lifecycle management strategy.

Customer lifecycle management is the process of building an understanding of consumer expectations throughout their journey, from discovery to purchase, experience, and retention. It helps your team track the various touchpoints that turn someone from an interested prospect into a happy and engaged customer. And it makes building products that actually solve problems for your target audience much easier.

Effective customer lifecycle management helps your team keep track of the various paths potential customers take with your service. This knowledge builds empathy for the problems your product solves and helps your team create experiences that build loyalty and trust in your brand.

Customer Lifecycle Management Builds Empathy with Consumer Needs

Customer lifecycle management brings your team closer to people’s actual experience with your product — putting your team in the customer’s proverbial shoes. When that happens, gaining empathy for the problems potential customers face every day is simple. Your team can take that knowledge and use it to create solutions that make a real-world impact on customers’ lives.

People’s motivations and desired outcomes differ at each stage of the lifecycle. Someone who’s just starting to understand their own problems needs support and education, whereas someone who’s decided your product is the solution needs encouragement and an engaging user experience. Empathizing with these underlying needs is how your team builds lasting customer relationships.

There are six stages in the customer lifecycle:

  1. Awareness: People look for a solution to their problem and discover your company.
  2. Engagement: Potential customers actively seek out more information about your product or service.
  3. Consideration: Prospects narrow down their options and try to figure out the best solution to their problem.
  4. Purchase: Prospects become customers by making a purchase.
  5. Experience: Customers use your product to solve their problem.
  6. Advocacy: Loyal customers sing your praises to their colleagues and friends.

Knowing how people interact with your product at each stage of the lifecycle is a crucial aspect of customer lifecycle management.

Let’s say you sell a product that helps individuals record better audio for their podcasts, and you’ve identified one of your key differentiators as the ability to streamline the mixing process by automatically removing background noise. How you speak about that feature has a direct impact on how a customer perceives its value. A potential customer in the awareness stage would need to know why background noise is a problem, while someone in the consideration stage would want to see how the product actually works.

Understanding how to communicate your product value at each stage of the customer lifecycle is the key to moving potential customers closer to making their purchase decision.

Building empathy with customers is also a great way to get to valid conclusions faster. Instead of spending time interviewing current customers and doing market research and competitor analysis, your team will intuitively know what types of products help customers accomplish their goals. You’ll be able to predict the impact of new products or features based on a comprehensive understanding of the customer lifecycle.

Customer Lifecycle Management Helps You Speak to Product Value

Each stage of the customer lifecycle represents a different mode of thinking for customers. Someone at the awareness stage of the process is going to have different wants and needs than someone at the consideration stage — both of whom have vastly different ideas than someone in experience or advocacy. Communicating your product’s value throughout the customer journey requires a comprehensive understanding of each stage’s unique mode of thinking.

A customer lifecycle management strategy helps you understand these modes and communicate effectively no matter where someone is in their journey.

Building your own app? Get early access to our Livestream or Video Calling API and launch in days!

Let’s say you’re speaking to a potential customer at the consideration stage of their lifecycle. At this point, they’ve identified a problem and vetted potential solutions, one of which is your company. To help them move from consideration to a final purchase decision requires a clear explanation of why your product is the best choice.

Your goal is to convince them to buy. Push these potential customers toward product demos and webinars that showcase your tool in action, and provide them with content that shows exactly how your product solves their problem. Someone gearing up to make a purchase decision is going to think about your product differently than someone who’s already made their purchase.

Let’s say that same person chooses your product and has moved past purchase into the experience stage of their lifecycle. Your goal now is to validate that purchase by:

  • highlighting various features that add value to their experience
  • sharing next-level strategies they can use to get more out of the product

You don’t need to convince them that your product solves a problem; you need to help them move past the problem and get on with their goals. Providing insight into their success, whether it’s celebrating wins through targeted in-app messaging or providing metrics to back up their success, will help nudge that person closer to the advocacy stage.

Customer lifecycle management helps you map out the different modes of thinking at each stage and tailor your messaging accordingly. The better you are at communicating value throughout the lifecycle, the easier it is to build the types of relationships that support your business.

Customer Lifecycle Management Increases Lifetime Value

Loyal customers provide more long-term, predictable value to your business. According to an InMoment trend report, 61% of loyal customers are more inclined to make repeat purchases from the same company. Customer lifecycle management helps you understand what fosters loyalty as customers move from discovery and engagement to purchase and user experience with your product.

That’s how customer lifecycle management impacts lifetime value (LTV). LTV is a measure of how valuable an individual customer is over the duration of their relationship with your company. More valuable customers help you capture more predictable revenue and understand what features foster the same kind of engagement in new users.

Insight into each customer’s product experience guides your team in developing new products or features to make that experience better. Adding continual value to the product experience in that way has a direct impact on your company’s bottom line. When customers can easily recognize this value, they’ll stick around longer, engage with your product on a deeper level, and become more valuable over time.

A 2019 survey by Pointillist found that 90% of teams agreed that tailoring the customer experience to this lifecycle journey made a positive impact on LTV.

Lifecycle Customer Management

Let’s say you have a new customer in onboarding that shares characteristics with other high-value customers currently using your product. That knowledge helps you reach out proactively and share tactics or best practices that this new customer can use to become a more loyal and engaged user.

Recognizing how these high-value customers move through each stage of the customer lifecycle also helps you tailor your content experience and product development strategy to build that loyalty along the way. If every customer you acquire has the potential to become more valuable over time, fostering those relationships is a smart move for scaling your business.

Customer Lifecycle Management Is the Key to Effective Product Messaging

The product development process requires in-depth knowledge of both your customers’ desired outcomes and your business goals. When your team understands how people move through the customer lifecycle, it helps them gain insight into these desired outcomes, as well as the various problems your product solves. That makes it much easier to communicate your value at key points in the journey, from awareness to advocacy, and foster relationships that support your business goals.

Want to see how Stream’s reliable, scalable and performance-first Chat can transform your business? Try Stream’s free, 28-day Chat Trial!

decorative lines
Integrating Video With Your App?
We've built an audio and video solution just for you. Launch in days with our new APIs & SDKs!
Check out the BETA!