Business needs to build effective ways of interaction with consumers. Understanding its customers’ core needs, a company can offer clients goods or services which are the most relevant and valuable. As a product or an organisation, a consumer has his or her development pathway in terms of relationships with a seller. This is a process called customer lifecycle. The essence of this concept is that each customer goes through a series of stages interacting with a company’s product . Can the business influence this lifecycle in any way for its benefit? Of course, yes. In modern marketing, there is such a concept as customer lifecycle management (CLM). This management consists in the fact that a company takes actions allowing it to move consumers through different stages of their lifecycle step by step – from the first contact with a brand to a formation of loyalty . In this case, we can claim that customer lifecycle is the basis for the implementation of communication actions between a company and a consumer within a certain phase of interaction with the company’s product. Hence, the question arises: why? First of all, at each customer lifecycle stage, the business should act in such a way as to provide a consumer with the value he needs. Otherwise, all of the company’s activities would be meaningless: customers would simply ignore the impact on them, as there have been no relevant offers. This means that campaigns at a particular phase of this cycle should be targeted at the current consumers status . In other words, a company must understand:
- if a consumer is a new one or not;
- if a consumer had made a purchase, after this he or she bought something one more time or it was a one-time thing;
- if a consumer can be identified as a risk client (i.e. he or she can stop buying the company’s products at all), there are some possibilities for reactivation or not;
- if a consumer has a high level of regular, repeating purchases, transforming him or her to a loyal customer has potential or not.
Customer retention costs less than acquisition. Besides, according to studies, a growth of retained clients share by 5% boosts company’s profits to 95% . So, all CLM campaigns can be mainly focused on retaining existing customers: from stimulating their re-purchase to creating true loyalty to a product.
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