Everything You Wanted to Know About Customer Lifecycle Management
What is Customer Lifecycle Management (CLM)?
According to Wikipedia, Customer Lifecycle Management (CLM) is the measurement of multiple customer-related metrics, which, when analyzed for a while, indicate the performance of a business.
The overall scope of the CLM process involves all functions of an organization. This would include iterative lifecycle stages like awareness, engagement, conversion, retention, cross-selling & upselling, loyalty, and lapsed customer win-back.
This can be further generalized into product introduction, target profiling of customers, customer acquisition, growth of customers and increase in customer lifetime value, cultivation of loyalty, and termination of the customer relationship.
Any customer lifecycle management program must use a customer experience platform (CXP) and customer relationship management (CRM) system.
Why Is CLM Important?
Customers are the lifeline of any business, especially paying customers. Every business wants to attract more and more customers towards them. The entire customer lifecycle assumes importance as you don’t want to build any friction in the journey.
It starts with customers learning about your offerings and determining if they would fit them – will it make them run their business better? If the answer is yes, then they engage with you and become a paying customer.
After this comes the adoption phase, where it should continue to deliver benefits to them. Then you add the bells and whistles of additional value to their purchase and increase the customer’s lifetime value.
As they continue to find value in the relationship, your customers become loyal ambassadors who will refer and bring you additional business.
CLM allows you to understand the friction points, enabling you to keep improvising and improving to provide an exceptional customer experience.
Here are a few areas of improvement:
- What are the common reasons why your customers reach you? For example, is it about using a particular feature, how it can be integrated, report generation, etc? Once you have this information, you can create assets quickly, allowing your customers to tide over these challenges.
- Talking to your customer-facing resources will throw up possibilities you haven’t thought about while creating a product. For instance, your customer uses your product for a use case that hasn’t been considered. Collecting and working on this information would allow you to improve your agent training and the associated product collaterals.
- Your customers find it challenging to reach your customer service agents. How do you ease this process? You can direct them to self-service platforms like website FAQs or chatbots, where most of their transactional queries can be addressed. You should also allow them to talk to an agent anytime during the interaction.
- Your customers will have to repeat themselves whenever they contact your customer service. No customer likes to do this. You can avoid this by integrating your customer experience platform with your CRM and other interaction channels like website, email, chat, SMS, social, and mobile. This would give you a single view of your customers’ interactions on a single interface. Your customers will never have to repeat themselves.
- How do you identify if your agents provide the best possible customer experiences? Some metrics are available for you to determine, like CSAT, NPS, and agent-level metrics related to resolutions. Besides that, you can use an Analytics engine to analyze customer frustration, compliance, and misselling issues. Analytics engines can analyze voice as well as text.
What Are the Benefits of CLM?
We discussed why CLM is needed in the previous section. Once you understand the friction points and improve on those, we will end up with the following benefits.
- Improved customer satisfaction and loyalty
- Maximized customer lifetime value
- Increased customer retention rates
- Higher revenue growth through cross-selling and upselling
- Enhanced customer experience
- More efficient and effective marketing efforts
- A greater understanding of customer needs and preferences
- Competitive advantage through personalized and targeted strategies
Components of Customer Lifecycle Management
I’d like to take this opportunity to contextualize the components of CLM using the e-commerce vertical as an example. This would allow you to visualize the components.
You divide your customers into segments based on demographics, purchasing behavior, or preferences. This helps create targeted marketing campaigns and personalized communication to engage customers effectively.
This component keeps improving with time as you get to know more and more about your customers.
Customers’ touchpoints in interacting with your brand include website, mobile apps, social media platforms, product packaging, delivery information via SMS & email, feedback & surveys, and customer support.
Optimizing these touchpoints ensures a seamless and consistent customer experience across different channels.
Data Collection and Analysis
You collect customer data through various data sources – website analytics, purchase history, social media interactions, and surveys.
This data would provide insights into customer preferences, behaviors, needs, and wants. Take, for instance, you can analyze browsing patterns that can help identify popular products or understanding customer feedback can uncover areas of improvement.
With insights from disparate data sources, you can personalize your marketing messages, product recommendations, and offers for individual customers.
For instance, you can send targeted email campaigns, suggest relevant products based on past purchases, and provide tailored discounts to specific customer segments.
Customer Support and Engagement
Allow your customers to reach through their preferred channels of interaction – chat, email, phone, website, social, or mobile. Having them all integrated makes it easier for your customers and agents.
Engage your customers through loyalty programs, exclusive content, or social media interactions fostering long-term relationships.
Customer Feedback and Surveys
Make it easy for your customers to provide feedback. It can be through surveys, reviews, feedback forms, one-click, and voice message responses.
This helps understand customer satisfaction, identify pain points, and gather insights for improvement.
For instance, a post-purchase survey can help understand the customer experience and satisfaction levels, allowing the company to improve future experiences.
Customer Journey Mapping
Visualize the different stages and touchpoints involved in the entire customer journey.
Assume that 40 out of 100 customers are dropping off on the payment page; it would be a severe concern.
You will have to optimize your payment page for a better experience so that the drop-off rates are reduced.
Alternatively, you can send an offer to all those who dropped off at the payment page stating they get 10% or 20% off on completing the abandoned purchase. You will end up converting a sizeable chunk of abandoned customers.
Customer journey mapping would help guide your customers from awareness to loyalty in the lifecycle.
Marketing automation is the core of customer lifecycle management. You get data from disparate sources, analyze them, and gain insights from them.
Now, what do you do with those insights?
You will have to make it actionable.
How do you go about doing it?
The easiest way to do this is through marketing automation tools.
For instance, the automation tool can help you schedule social posts and send personalized recommendations, offers, and campaigns at pre-defined intervals.
It ensures timely and relevant communication with customers, improving engagement and efficiency.
Establish performance metrics and key performance indicators (KPIs) to track and measure the success of CLM initiatives.
This is key to realizing the benefits of your initiatives.
This would allow you to determine if the CLM strategies are effective and help identify areas for optimization.
How Do You Go About Implementing Customer Lifecycle Management?
Here is the step-by-step process that you can follow.
CLM is a powerful differentiator in today’s competitive landscape, where customer expectations are higher than ever.
By embracing customer-centricity and prioritizing CLM, businesses can turn their customers into advocates who champion their brands.
Effective Customer Lifecycle Management is the key to building enduring customer relationships and driving business growth.
So, embark on this journey, invest in the power of customer-centricity, and watch your business grow like never before.