By: Patricia Naidoo, Prashant Malkani and Buket Mat
Published: July 09, 2024 | Updated: July 09, 2024
Read time: 7 minutes
How do you use marketing strategies and channels to engage with customers through the entire customer journey? Whether you're an aspiring marketer or someone who wants to learn more about key marketing concepts, this beginner’s guide will help you understand lifecycle marketing. You’ll get a holistic view, from what lifecycle marketing is, to lifecycle stages, channels, goals and KPIs. You’ll even come away with 10 useful tips for getting started.
What is lifecycle marketing?
To define lifecycle marketing, let's start first with what it isn’t. Lifecycle marketing isn’t a customer relationship management strategy. It’s also not about using email marketing, social media or programmatic advertising. These are complementary tools to customer lifecycle marketing.
Lifecycle marketing is a customer-focused strategy that interacts with and engages customers starting from the moment they hear about your brand. After this initial engagement, the goal of lifecycle marketing is to turn customers into loyal customers. Given that customer retention is relatively easier and cheaper than customer acquisition, the ultimate goal is to keep your customers as long as possible. You want customers to buy from you repeatedly! Understanding the needs and pain points of customers at each customer lifecycle marketing stage is important, as well as responding to them with the right strategies and solutions.
Is it the same as "marketing lifecycle"?
Marketing lifecycle and lifecycle marketing are two concepts that are used interchangeably. Marketing lifecycle refers to the entire customer journey, from customers becoming aware of your offering to becoming an advocate for your brand. Marketing lifecycle is focused on that process. On the other hand, lifecycle marketing is about the execution. It is about understanding the entire customer journey and is focused on customer needs at each touchpoint. Lifecycle marketing uses different channels, communication methods and strategies to address these customer needs. It is the combination of all activities to engage with customers throughout the marketing lifecycle.
What are the stages of lifecycle marketing?
Lifecycle marketing has four main stages: acquisition, activation, usage and retention.
Stage 1: Acquisition
At the acquisition stage, customers get to know your brand and what you offer. Acquisition starts with capturing the customer’s attention. You acquire new customers by directing prospects to the right products and offers at the right time. At this initial stage, defining the audience, choosing the channel mix to reach customers and preparing sales materials are important.
Stage 2: Activation
Activation happens after customers make the purchase. This is the onboarding stage. It’s about making sure that your customers have a positive experience. You might support the customer with welcome emails, welcome kits or calls. After you successfully acquire the customer, you need to work hard to sustain the relationship and make sure you deliver what you promised.
Stage 3: Usage
After the activation, you need to make sure that customers use your product. Creating customer engagement and loyalty are the focus as the customer relationship is being built. Educating customers on how to use the product is paramount. When done successfully, this stage can further encourage customer engagement and spending.
Stage 4: Retention
Implementing proactive and reactive strategies will help engage and retain valuable customers. In this stage, customers are encouraged to repeat their purchases.
Related terms and concepts
Retargeting: Mostly at the acquisition stage, retargeting is about reaching out to customers who haven’t converted. These customers have visited your website or app, but their encounter didn’t convert into a purchase. Programmatic engines and advertising can be used to reach out to them. For retargeting, banner ads, video ads, audio ads social media and lifecycle email marketing can be used. A strong call to action when you deliver your message can encourage customers to reevaluate your offer.
Early month of book (EMOB): Particularly in the financial services industry, this concept is crucial. Part of the activation stage of lifecycle marketing, EMOB is about engaging with new cardholders from the day they open an account. As a financial institution or issuer, you cannot stop after acquisition. You need an EMOB strategy to encourage customers to use your product after they sign up. For example, in the EMEA region, if you do not activate your requested card in 30 days, issuers can face compliance issues.
Loyalty program: At the acquisition and retention stage, loyalty programs are important. You can encourage your existing customers to refer others and create offers so that loyal customers will repeatedly purchase from you. Building a loyalty program for your business can be achieved by offering rewards, discounts and incentives to reward customers for repurchases and new purchases.
Channels used in lifecycle marketing
Throughout lifecycle marketing, various channels are used at each touchpoint. Choosing the right channels is important to implement lifecycle campaigns. Owned channels refer to the ones that you, as a business, own and control. For example, on your website and app, you can use relevant banners. Or you can use paid media digital channels such as Google or Facebook to acquire customers. Mostly, digital channels are used for acquisition campaigns.
Emails
To keep customers engaged and interested, lifecycle email marketing can be used at each stage in the customer journey. After the purchase at the welcome stage, you can send an onboarding email to help inform customers about how to use the product. To create a consistent relationship with the customer, you can send frequent information about the industry and your products.
Social media
You can use Facebook, Instagram, X, Facebook, LinkedIn and YouTube to share relevant and engaging content. Share informative articles, images and videos and ask for your customers’ opinions through polls and quizzes.
Push notifications and in-app messaging
If your brand has a mobile app, you can create automated alerts. You can tie these notifications and messages to events such as a subscription ending or after another purchase from your brand. You can also announce news about your brand and celebrate milestones and special days.
Lifecycle marketing goals and KPIs
Measuring lifecycle campaigns is essential and each lifecycle marketing stage has different KPIs. Here are some important KPIs to monitor:
Customer acquisition cost (CAC): CAC measures how much your business spends to acquire new customers. It is calculated by dividing the total expenses to acquire new customers by the total number of customers acquired over a certain time period. The goal is to decrease the CAC as much as possible. Early customer engagement and high customer retention decreases the CAC.
Conversion rate: This is an important factor for the usage stage. It shows the percentage of customers who use your product compared to all the customers acquired.
Churn rate (or attribution rate): Churn rate is about how many customers you are losing every month. It represents the percentage of customers who stop shopping with you.
Customer retention rate: This is the rate of customers who continue to shop with you. Implementing a loyalty program, customizing the offerings, having good support for your product and constant engagement with customers increases the retention rate.
The goal is to maximize customer retention rate and decrease the churn rate as much as possible.
Reactivation rate: This shows how successful your brand is at convincing inactive customers who had previously made a purchase to start buying from you again.
10 tips for getting started with lifecycle marketing
Here’s how to get started with a lifecycle marketing effort that can help your business enhance the customer experience, build a loyal customer base and generate more revenue.
Tip 1: Identify your objectives and goals
Tip 2: Define your customer personas
Tip 3: Decide on the customer journey and touchpoints
Tip 4: Address customer needs, expectations and preferences
Tip 5: Provide valuable insights and information to customers
Tip 6: Send personalized communications
Tip 7: Experiment with different channels
Tip 8: Ensure a frictionless customer experience
Tip 9: Measure and analyze the results of your lifecycle campaigns
Tip 10: Focus on customer retention
In the end, the most important thing to keep in mind is that lifecycle marketing is never linear. Some of your customers are at the retention stage and others are in the usage stage. Each phase of the lifecycle requires different focus, approach and metrics to deliver on customer needs, drive actions, and optimize the engagement to generate your desired business outcomes.
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