26 Jun Put Down That Funnel, and Start Thinking About Customer Lifecycle
There is one question no one wants to hear at the end of a presentation: “and then what?” In that one simple phrase, all your efforts are reduced to nothing, because it’s made clear that you haven’t thought about the whole picture. As marketers, we like to avoid this by coming up with constructs that simplify the marketing process. For example, the Lead Funnel.
There is a lot of charm in the idea of the funnel. It makes the marketing efforts seem more scientific. You get as many leads from the world wide web, and with various tools and tweaks, you distil them into sales.
And then what?
Getting to the sale means that you now turned your lead into a customer, but surely the journey doesn’t end there. The top marketers now realize that there is a more to their job than simply distilling leads. If they want their clients to succeed, they need to think beyond the funnel, and see that a customer is not only willing to make a purchase, but also to come back, and eventually, convince others to do the same.
This is the essence of lifecycle marketing. Taking into consideration each point of the customer’s interaction with the company yields a stronger marketing plan that will serve the business for much longer. Focusing on the customer’s lifecycle is taking a step back to view things from a wider angle. In a nutshell, the aim of marketers is not only to reduce customer acquisition costs (CAC) but to increase customer lifetime value (CLV).
How it works
The first steps should be familiar to anyone that has experience with digital marketing. Reaching out to marketing qualified leads (MQLs) and engaging them with your product and unique selling point. Successful engagement will yield sales qualified leads (SQLs). In many agencies and marketing departments, this is where the marketing aspects end and the sales team take over, not so in lifecycle marketing.
Once a lead has engaged with the company and become a customer, there should be an effort to retain them as such. This is very much a marketing effort. After all, repeating clients have a much lower CAC, and every time they do business with you, you gain more value.
Even after a customer has built a relationship with your company, they are still leads in a sense. Added value to the client, and upselling them on additional services will increase the CLV. Your marketing team should see this as any other marketing effort, simply with an audience of existing clients.
Finally, customers can become advocates, and help funnel leads to you themselves. This final piece of the cycle was considered to suit small businesses almost exclusively, but large companies benefit from referrals all the time. By paying attention to your existing customers, you encourage them to have an emotional stake in your business’ success and growth.
Focusing on Value
In the past, marketing efforts were a numbers game. The more leads you generated, the better. However, it’s a good idea to look away from leads and think in terms of costs and value. The lower the CAC and the greater the CLV, the more effective the marketing efforts and the more the company profits from them.
In many ways, lifecycle marketing features the best of several worlds. It retains the proficiency required by lead-based marketing and accentuates it with retention and growth. Value is the key phrase here. The customers enjoy added value from the company, and the company gains more value from each client. The cycle feeds itself, so at no point you’d find yourself asking “and then what?”