What is the customer life cycle?

Would you treat a person you’ve just been introduced to in the same way as a lifelong friend? The same thing happens in customer relationship management. In this sense, there are different stages that the consumer goes through before, during and after the purchase. This is what is known as a customer life cycle.

Of course, knowing the customer’s life cycle is extremely important to provide personalized attention, an objective that is key to competitiveness in today’s market, where consumers demand a one-to-one experience. In fact, according to Twilio Segment’s The State of Personalization 2022 study, almost one in two people says they would become a repeat customer if the company provides them with individualized attention.

Why is it important to consider the customer life cycle?

As we have mentioned, to implement this customer centricity approach, it is necessary to know the customer life cycle. Only then can you determine what phase each person is in and, from there, provide that demanded personalized experience. It is about being able to communicate with consumers in the most appropriate way in each case.

As a consequence, you will be able to increase the capture of leads, improve the customer conversion rate, increase consumption per customer, reduce turnover, strengthen loyalty, etc. In short, you will achieve a greater ROI from your marketing, sales and customer service actions, as well as greater business profitability.

Likewise, it also has a direct impact on the management and financial planning of the company. And it is that this concept is necessary to determine the value of the customer’s life cycle or, in other words, the money that each consumer will spend throughout his life as a customer of your business. Thanks to individual statistics for each case, you can comprehensively calculate the company’s revenue forecast globally and per consumer and adjust actions to achieve established goals.


What are the stages of the customer life cycle?

The most widespread customer lifecycle model is the one developed by Jim Sterne and Matt Cutler in their article E-Metrics: Business Metrics For The New Economy. It breaks down the different phases of the consumer journey throughout the relationship with a brand. However, it should be noted that not all of them are always present in the same client, since in certain cases some can be ignored. We present to you what these key moments are.


The first stage of the customer life cycle is when the consumer hasn’t even bought your brand yet. Therefore, in this phase are all the members of your target: those people who may be interested in buying your product or service.

How are you going to reach them? Here a complete inbound marketing strategy comes into play, which allows you to make yourself known among your target audience and attract them to your company. First of all, you must know who your buyer persona is through market studies that discover their habits, preferences, needs, lifestyle, etc. Then, you must gain visibility in the market through the creation of relevant content, positioning of the web page, hiring of targeted ads on platforms such as Google AdWords and advertising on social networks, among other things.

Do not forget to leave Calls to action (CTA), that is, calls to action so that the visitor enters the page and leaves their contact information for future communication. Also, how about offering a discount to those who sign up? Remember that the goal is for them to end up choosing your brand and, in a market with an extremely wide offer, every effort to achieve that first contact is little.


Your marketing campaign has been effective and the consumer has responded to your appeal, showing interest in your products or services. Thus, it is already in the acquisition phase.

Now, your mission is to convince him that your brand is the one that best responds to his needs, so you must present the added value that your products and services bring him.

To do this, you can use different lines of action. On the one hand, you can automate an email with a tutorial on the use of the product or service or a newsletter informing about active promotions for new customers. On the other hand, you can also make phone calls to respond to any concerns they have or implement communication systems with the consumer so that they can find quick answers if they need them. For example, you can include a chatbot on the web or provide telephone support.

Likewise, you must take care of the omnichannel strategy, that is, you must coordinate the different communication channels of the company so that the client receives the best experience throughout the purchase process and has access to a homogeneous and constantly valid discourse regarding their history. . For example, it would not contribute to the conversion if the consumer receives an offer through social networks, but later does not find it on the website, since they would feel confused and abandon the purchase. Hence, according to Aberdeen Group, companies that use omnichannel strategies have 510% higher profits per customer.


Once you perceive that the person is convinced about the benefits of your product or service, it is time for conversion, that is, to convert the consumer into a customer for the first time.

At this stage of a customer’s life cycle, your efforts must be aimed at making the experience 100% satisfactory, so that they repeat. Of course, it is convenient that you previously carry out prospecting work, that is, that you identify who are potential clients of all the people who have responded to your call. In this way, you will avoid wasting time on consumers who do not really want to buy. Keep in mind that proper qualification of leads into prospects increases sales by almost 50%, according to The Annuitas Group.

Once the prospects have been defined, you will have to encourage purchase through specific marketing actions for each case: make an offer for a limited time, send an email with the products you have seen and the opinions of previous customers, call to make a personal discount, practice remarketing, etc. Of course, it is essential to take care of all aspects of the purchase process, from the navigability of the web or the existence of offers that act as a lure to the payment facilities or the speed in the shipment of orders. And, according to Microsoft’s Global State of Customer Service report, 58% of consumers would abandon a brand whose customer service is poor.


However, the customer life cycle does not end with the purchase. Conversely, you should pay close attention to the growth and retention phases, as that is where most of the profitability lies. In fact, the probability of selling to a new consumer is between 5 and 20%, while, in the case of existing customers, the percentage rises to 60-70%, according to Altfeld.

Therefore, once you have captured a new customer, start the machinery to increase the amount of the shopping cart. Cross selling and up selling strategies will be very useful for you. In the first, it is about offering complementary products to the purchased item. For example, if the customer is going to buy a camera, you can send them an email with the catalog of lenses available for that model, or even offer them a camera package with more lenses. In up selling, for its part, the idea is to sell a new version of the same product. Continuing with the previous example, you could offer him a new digital camera, but much more up-to-date than the one he bought.


Another of the key phases of the customer life cycle is retention. And it is that, in this process, the Pareto Law can be applied, that is, 80% of the profits of a company come from 20% of its clients. Specifically, as quantified by the Harvard Business Review in a renowned study, increasing customer retention rates by 5% increases profits between 25% and 95%.

Here it is crucial that you guarantee a positive post-purchase experience through loyalty programs. For example, you can send feedback surveys with incentives, thank them with a personalized note, give them gifts or personalized offers, offer free shipping for loyal customers, provide discount vouchers, remind them to buy again soon, or allow access priority to new products or services.


Reactivation is the last phase of the customer’s life cycle and consists of recovering the trust and interest of the consumer to bring them back when they have abandoned your brand because of the competition.

In these cases, you must reinforce marketing and sales strategies with initiatives that are more attractive to the user. This means making calls or sending emails to find out what motivated them to leave, offering them deep discounts on products or services, or even providing them with credit in your store so they can buy again. Everything will depend on the value of the client. In other words, a high-profile consumer, with frequent and large shopping carts on the economic level, will require more aggressive action to reactivate it than another whose shopping cart was small and sporadic.


As you can see, extending the customer life cycle requires a deep knowledge of marketing and sales tools and strategies. For this reason, Banco Santander launches the call for 5,000 Santander Skills Scholarships | Business for All 2023, aimed at those who want to improve their skills to face the professional world. Furthermore, all of this has been designed by the best experts at Harvard Business School Publishing, one of the most prestigious educational institutions in the world.




Leave a Reply

You might also like