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      Customer Data Platform (CDP)

      What is Customer Lifecycle Marketing / Management (CLM)?

      By Samuel Kellett

      Jan 05, 2022

      18 min read

      Customer Data Platform (CDP)

      What is Customer Lifecycle Marketing / Management (CLM)?

      If you Google “customer lifecycle marketing” or “customer lifecycle management,” you’ll come up with a number of different results. There is no hard and fast rule for what makes up a customer lifecycle, largely because many marketers are still trying to figure it out.

      What is Customer Lifecycle Marketing?

      The customer lifecycle is a way of describing the different stages a customer goes through during their interaction with your brand. Customer lifecycle marketing describes the process of marketing to customers based on the stage they are in.

      You want to address your customers based on the stage they are in at the time of your message. That way, you can communicate in a way that’s meaningful for them personally. You can target them with tried and tested campaigns that have worked for that stage before, preventing churn, or increasing their customer lifetime value.
      One final thing to keep in mind is that the customer lifecycle is non-linear. While graphic representations show a progression of stages toward an ideal customer, users may skip stages depending on their activity.

      Why is Customer Lifecycle Marketing Important?

      Back in the year 2000, NetGenesis and Target Marketing published  E-Metrics: Business Metrics For The New Economy. The whitepaper detailed the idea of the customer lifecycle, and how to use it in the still maturing industry of E-Business. The authors discuss the business cultures of the past, and how we have now shifted to a customer-centric economy.

      The first half of the 20th century focused on mass production, led by Henry Ford and his assembly line. In the second half of the 20th century, business culture began focusing on the importance of distribution, something Sam Walton conquered through transportation and logistics.

      The rise of the internet led to a new area of importance. The authors of E-Metrics identified that the beginning of the 21st century shifted the focus of business culture to the importance of knowledge about individual customers, led by Jeff Bezos of Amazon.

      This is where we are now. The customer lifecycle model the authors discuss is essentially the same as the model many use today:

      Customer Life Cycle

      (Graphic from E-Metrics: Business Metrics For The New Economy)

      The difference is that the personalization and automation techniques the paper describe have only recently begun to realize their full potential. Something the authors understood would be the case:

      “The rich store of information collected in the course of doing business on the
      Internet should be carefully archived and protected. Holding onto your raw
      data today will allow for deeper and deeper analysis tomorrow.” E-Metrics: Business Metrics For The New Economy

      Customer lifecycle management is as important to business today as the assembly line was to business in the 1900s. A customer lifecycle provides marketers with the framework for communicating with customers at each touch point in their interaction with your brand. Campaigns can be automated and personalized like never before, and companies ignoring this will be left behind.

      Bloomreach’s Customer Lifecycle Model

      Bloomreach’s customer lifecycle model is based on thousands of hours working with e-commerce sites, and enhanced with detailed user data that we used to create a custom RFM analysis for customer lifecycle segments.

      Our customer lifecycle model identifies five main stages:

      • Acquire
      • Retain
      • Increase Value
      • Cherish
      • Reactivate

      We then break those stages down further to create 14 customer segments, using an RFM analysis for the traditional 11 segments (this article contains a good representation of the 11 segments and their corresponding RFM scores), and simple segmentations for the three added segments of engaged visitor, loyal visitor, and first-time customers.

      Finally, Bloomreach’s model introduces specific campaigns you can use to interact most effectively with each segment. Take a look:

      Customer-Lifecycle-Marketing-Graph

      Breaking Down the Customer Lifecycle Model Graphic

      ACQUIRE — Bring new traffic to the site and convince them to make their first purchase.

      Engaged Visitors:

      Who they are: Users who visit, but don’t purchase or leave an email.
      What your goal is: Secure a communication channel with the customer.
      Campaigns:

      • Email collection banner
      • Banners promoting Unique Selling Propositions of the site
      • Limited-time vouchers for first purchase

      Loyal Visitors

      Who they are: Users who don’t purchase, but have left an email.
      What your goal is: Get them to make their first purchase.
      Campaigns:

      • Email with fresh sales right after visit
      • Weekly newsletter of best-selling products
      • Onboarding newsletter campaign

      RETAIN: Get your new customers to make another purchase.

      First-Time Customers

      Who they are: Customers who have made one purchase.
      What your goal is: Ensure their experience is positive enough for a second purchase.
      Campaigns:

      • Send feedback surveys and offer vouchers to complete them
      • Email them with complimentary products

      Recent Customers

      Who they are: Customers who purchased recently, but haven’t purchased often.
      What your goal is: Ensure a positive post-purchase experience.
      Campaigns:

      • Ask for product reviews and provide incentives
      • Give vouchers for their friends
      • Offer to provide reminders for items they may purchase again soon

      INCREASE VALUE: Upsell your retained customers to increase their frequency and average order value.

      Promising Customers

      Who they are: Customers who make periodic purchases, but spend little.
      What your goal is: Slowly increase their frequency of orders and/or monetary value.
      Campaigns:

      • Upsell them with limited-time offers
      • Incentivise higher spend with bundle deals

      Potential Loyalists

      Who they are: Customers who have made recent purchases, spend a good amount, and order often.
      What your goal is: Similar to Promising; continue increasing the frequency and monetary value of their orders.
      Campaigns:

      • Offer priority shipping as a thank you
      • Continue to incentivise higher spend with bundle deals

      CHERISH: Show your most valuable customers how important they are to you

      Loyal Customers

      Who they are: Customers who spend a lot and are responsive to marketing communication.
      What your goal is: Keep them happy and upsell them toward Champion.
      Campaigns:

      • Send a gift voucher with a personal note and a team photo

      Champions

      Who they are: The best customers. They spend the most and spend often.
      What your goal is: Keep giving them positive experiences with your store. Show them how important they are.
      Campaigns:

      • Reward them with access to new products first
      • Include the occasional gift in their orders
      • Have customer care call them personally when communication is needed

      REACTIVATE: Bring back lapsed customers. Focus your attention and resources on the most valuable ones.

      Can’t Lose Them

      Who they are: Former Champions who have stopped purchasing.
      What your goal is: Use whatever you have at your disposal to bring them back. These are the big customers that you do not want to lose for good.
      Campaigns:

      • Send them store credit to get them purchasing again
      • Call them directly to ask why they’ve stopped shopping with you

      At Risk

      Who they are: Previously high-value customers who have recently stopped purchasing.
      What your goal is: This group needs a push to get them back to purchasing; act now before they lapse completely.
      Campaigns:

      • Send a personal note to re-engage them along with a small gift
      • Send exclusive offers just for them

      Needs Attention

      Who they are: Customers with above average frequency and monetary value, but who haven’t purchased recently.
      What your goal is: Similar to at risk, but with less money behind your reactivation campaigns.
      Campaigns:

      • Email them directly to ask why they’ve stopped shopping with you
      • Send exclusive offers that are less valuable than those sent to at risk

      About to Sleep

      Who they are: Low-value customers who haven’t purchased recently.
      What your goal is: Keep these customers without spending more than it’s worth.
      Campaigns:

      • Re-engage them on social media
      • Use the same campaigns as needs attention but with less budget

      Hibernating

      Who they are: Low-value customers who have stopped purchasing.
      What your goal is: Worth reactivating, but don’t spend too much time or money.
      Campaigns:

      • Send them a reactivation newsletter
      • Retargeting campaigns on social media

      Lost

      Who they are: Lowest-value customers who have stopped purchasing.
      What your goal is: Worth reactivating, but spend even less time or money than on hibernating.
      Campaigns:

      • Send them a reactivation newsletter

      Applying Customer Lifecycle Management

      First, run an RFM analysis on the data in your customer relationship management (CRM) system, and group your customer base into the segments described above. Now you can start designing campaigns for each segment (see our recommended use cases in the graphic above).
      You’ll want certain tools for designing and sending your communications:

      • Email Campaign Manager
      • SMS Campaign Manager
      • Push Notification Campaign Manager
      • Banner Ad Campaign Manager

      Ideally, you want your campaigns to run automatically, moving your users through the customer lifecycle from visitor to champion, with different campaigns used for each segment as users pass through it. To make this a reality, you need all of your customer information organized into a single customer view:

      a database with profiles for every individual user, detailing their interests, purchase history, site activity, etc.

      The more frequently your single customer view updates your customer data, the better. Otherwise you risk customers receiving communication meant for a segment they no longer belong to, or not receiving communication meant to prevent churn until it’s too late.

      Finally, you need a way to A/B test your campaigns to make sure they’re working. Make sure your testing software is quick and easy to use, as you will have a lot of campaigns to test. Even though the solutions we recommend have worked for us, there’s no guarantee they will work for your business. You should always be testing your campaigns. Be sure to also define a global control group that will never be targeted by campaigns so you can accurately understand each campaign’s value.

      Using Bloomreach For Customer Lifecycle Management

      As described above, you can deploy this lifecycle management plan without using Bloomreach, but there are advantages to using Bloomreach, like having all aspects of your customer lifecycle marketing available in one program.

      Using Bloomreach Engagement, a customer data platform (CDP), anyone can perform an RFM analysis of their customer base, and group the customers into the 14 lifecycle segments. No expertise needed. Within the same program, you can then design and run email, sms, push notification, and banner ad campaigns for each of the 14 segments.

      Our single customer view is updated in real time: the second customers do something that should place them in a different segment, they are moved automatically. If a customer starts to lapse, the reactivation campaigns automatically take over. The campaigns you create within Bloomreach Engagement will continue to run automatically for each continuously updated segment until you turn them off.

      It’s easy to A/B test your campaigns, because the testing is automatically built into the campaign designer. Try one use case on a particular group of promising customers. Try another on a second group of promising customers. And a third, fourth, fifth, however many you want. Compare them side-by-side in real timeBloomreach Engagement also lets you define a global control group of your site’s users. This control group will never be targeted by the campaigns, allowing you to see how much value each campaign is actually generating.

      Finally, you can create an initiative that categorizes and groups all of your customer lifecycle campaignsletting you easily keep track of which campaigns you’re running for each customer segment.

      Would automated customer lifecycle marketing campaigns increase the value of your customers? Schedule a personalized demo today with Bloomreach to learn more.

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      Samuel Kellett

      Head of Content

      Sam leads the content team at Bloomreach, where he manages the production of e-commerce articles and case studies, as well as the content for webinars and events. With his background in screenwriting and theatre, Sam brings a unique perspective to his role as Bloomreach’s head of content. Sam’s passion is storytelling: he is constantly exploring new and creative ways to explain complex topics.

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