Managing the Lifecycle of your Customers
The notion of a “customer lifecycle” conjures up an unflattering image of an assembly line of customers being robotically managed down a line and off to who-knows-where. I’d argue, though, that considering your customers across the entirely of your relationship with them, from initial contact to first sale to support of that sale to keeping them a happy customer, is, in fact, the management of a “lifecycle”. I’ll further argue that companies who do not employ such a practice with their prospects and customers will struggle to keep them over the long term. Most of us know revenue from existing customers is 5-6 times less expensive to obtain than revenue from new sources. In an article from earlier this year, Gartner is quoted as saying their research indicated “80 percent of your future profits will come from just 20 percent of your existing customers.” Taken together the message seems, at least to this writer, to be crystal clear: take care of your customers—they’re the most valuable asset you have.
This same article goes on to quote Bain as reinforcing that investing in customer relationships pays off, albeit sometimes down the line. So, logic dictates you need both new customers and happy long-term ones as well. But how do you keep existing customers happy? First, you make sure they are successful with whatever product or service they bought from you. Ensuring satisfaction both identifies problems with enough time to correct them, and demonstrates the importance of your customer to your organization.
Next, you engage. Connect through periodic live check-ins, electronic messaging, personalized notes from someone in the organization whose job it is to make sure initial success continues unabated. At the same time, look for cross-sell and up-sell opportunities. Successful, happy customers are comfortable adding functionality. Trust and satisfaction enable quicker purchase decisions and encourages enthusiastic sharing of information with industry colleagues. Oh, and hiccups get caught early enough to stop them from becoming problems.
Lastly, you respect your customers, large or small. Part of the lifecycle approach is the obvious fact that purchasing tends to be episodic and may happen infrequently. Don’t let your customer feel like they are only important because they’re buying something soon. Consistent engagement, ongoing respect regardless of where the customer is in the cycle on any given day, is core to customer retention, and customer retention can only happen when the customer is happy and successful.