Did you know that it's 5X more expensive to acquire a new customer than to keep an existing one? Or that 47% of customers that make their first purchase never make a second? It's critical that businesses not only focus on acquiring new customers but also ensure that that the people they do attract are activated, engaged, and retained.

Aligning your marketing around the customer lifecycle is the most effective way to drive measurable increases in revenue.

Customer Lifecycle Stages

The customer lifecycle can be broken down into four stages:

  • Reach new guests and capture them in your CRM

  • Activate new guests to turn them into repeat customers

  • Engage existing customers to increase their frequency or spend

  • Retain customers that stopped visiting

Where you focus your efforts will depend on what marketing you already have in place. But generally speaking, you want to make sure that you have effective marketing in place to activate new guests, to engage them, and to retain them before acquiring more.

Create a Digital Strategy

Based on where customers are in the journey, you'll want to leverage different marketing tools and tactics to move them along.

1. Reach

The first stage is all about attracting new guests who haven't heard about your brand before, to encourage them to create an account so you can continue to engage them through free/owned marketing channels. Reach new guests with:

  • Digital Ads
    Run Digital Ads to reach your guests wherever they are (Google, Facebook, Instagram, etc...).

  • Lookalike Audiences
    Leverage your CRM to create lookalike audiences based on your best customers, so you can target new guests that look like them. You can even exclude customers that are already in your CRM to ensure that you're only paying to reach new guests.

  • SEO
    Optimize your marketing content to increase organic traffic to your website.

  • Referral Programs
    Create a referral program that encourages existing customers to refer their friends and family in exchange for a small reward when they do.

  • Competitions
    Run a competition where customers need to create an account in order to enter. For example, sign-up for your chance to win a $100 Amazon gift card.

  • Influences
    Work with your most influential customers to reach their network.

2. Activate

Once guests are in your CRM, you want to nurture them into active customers. This is the moment where you want to learn about incentive-based marketing to ensure the time, money, and effort spent on reaching new guests pays off. Once you've got customers hooked on your brand and loyalty program they'll come back on their own.

A predicate for doing this well is maximizing the number of guests you can engage. E-commerce – digital purchases which always come with customer identity – is by far the most effective means to acquire new consumers. Organic loyalty signups are often the result of already engaged consumers joining your program to accrue benefits for their spending. If you can couple this with account creation when making the initial purchase you will increase your ability to convert new customers at your business.

Activate new guests with:

  • Marketing Automation
    Create an automated nurture series to convert new guests into repeat customers.

Learn more about how to activate your customers >

3. Engage

Your engaged customers are your most valuable, generating 80% or more of your revenue. Lifecycle automation has one goal: get as many customers as possible into this bucket.

It's important to treat these guests differently from the consumers in the other parts of the lifecycle journey. You may be tempted to go send a message to all of your customers to maximize your reach, but sending top-of-mind messaging about what's going on at your business to consumers who still aren't attached to your brand can waste your ammo on consumers who need a different message. By giving customers just getting to know you a journey that you can hone with A/B testing, and focusing top-of-mind updates on the customers who are already in love with your products you increases the value you can get from both groups.

Maximize revenue from existing customers with:

  • Top of mind marketing
    Keep your brand top of mind by letting customers know what's going on (new menu item, location opening, holiday specials, etc...).

  • Loyalty Program
    Create a special experience for your loyal members that encourages them to engage with you on a regular basis (ongoing rewards, surprise, and delights, secret menus, etc...).

  • VIP Program
    Identify your VIPs and super-serve them. Then use lookalike targeting to acquire more customers that look like them.

  • Up-sells
    Identify ways to increase the spend and/or visit frequency of these guests (get customers to try more products and/or services, etc...).

The more of these you do, the more revenue you'll drive from these customers.

4. Retain

Lastly, every brand faces the 'leaky bucket' problem where you're always going to lose a portion of the customers that you acquire. This is normal. While you can't retain 100% of customers, you can minimize churn by engaging customers as they start to lapse to keep them active.

Losing an active customer is different than losing a brand new one. If a customer tries your products and doesn't return, getting them back is more of a "second chance to make a good impression." Losing a customer that has a history of patronizing your business but got out of the habit has a higher likelihood of turning back into value. It takes less effort to win back a customer that previously visited you often than it does to get a stranger to get attached to your products. When a previous active customer leaves your business, offering a larger incentive to re-engage their activity is usually worth the cost. They've proven their value to your business and that they're worth fighting for.

Retain customers with:

  • Marketing Automation
    Create automated campaigns to re-engage guests as they lapse and personalize them by customer segment e.g. a different message/reward for VIPs.

  • Customer Feedback
    Use NPS to monitor the satisfaction of your customers, respond to customers who have a negative experience, and use written feedback to understand what causes customers to leave a high or low score.

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