The customer life cycle (also known as the customer loyalty cycle) describes the entire relationship between a customer and a company, from the first time the relationship is perceived until it is terminated. The aim here is to ensure that the customer does not leave after a single purchase, but remains loyal to the company and, in the best case scenario, recruits further customers by recommendation.

The customer life cycle is divided into six different phases, and ideally a customer passes through all of them without churning first:

1. awareness

In this first phase, the “Customer Life Cycle” begins. Your potential customers become aware of the company, the first “touch” occurs. For your marketing planning, it’s paramount to track exactly where these initial touchpoints are taking place. Because in this way it is possible to determine which advertising measures and marketing activities work best and where it is worth investing.

2. consideration

After that, you can show your potential customers the added value of buying from you. It comes to the first real contact, which can take place by mail, phone or via your website. As soon as someone is interested, interact with them. Of course, there is always the risk that the prospect will back out before becoming a customer. This makes it all the more important to provide customers with the information and offers they need in a timely manner.

This phase is also described by the term “leads”: Contact information from people who have shown interest in a service or product.

3. purchase

The first important milestone is now set, the prospect has decided on your product and becomes a customer. So now they form the basis of your customer relationship. To ensure that this lasts for the long term, it is important to make the customer’s buying experience smooth and incident-free. For example, if it hangs already during the payment or delivery process, that may be reason enough for this to remain the customer’s only purchase from you. In this case, you should communicate any complications appropriately. The customer must walk away from the purchase satisfied and with a positive feeling.

4. service

By now, your customer has formed an opinion about your product and may even recommend it to others. However, it is easier than ever for your customers to obtain and compare different offers and, in the worst case, they migrate to other providers.

To prevent your customer from defecting to competitors, the key now is to continue communication after the initial purchase. Cross-selling and up-selling measures and initial campaigns are suitable for this purpose. Furthermore, it must be ensured that you can react adequately to any queries or complaints. After all, customer satisfaction is a necessary prerequisite for customer loyalty.

5. binding

If your customer converts to a repeat buyer, this is the perfect time to intensify customer loyalty, further develop your business relationship and reward your customers for their loyalty. Exceeding expectations guarantees customer satisfaction and loyalty.

For example, you can show your appreciation through bonus systems, reward stores, vouchers or discount campaigns. Storing and analyzing customer usage data can help you optimize your offerings and target your customers more individually in the future. We would be happy to show you how you can get a 360° view of your customers or which retention tool is the most suitable for your customers in a personal meeting.

6. recovery

Your customer is considered a former buyer if they have not purchased any products or used any services for an extended period of time. This may be due to the fact that customer loyalty has diminished or contact with the customer has been reduced, as customer service is usually reduced in the course of the business relationship. You can counteract this with CRM systems, for example, by checking which customer has not been contacted for a long time in order to then prepare a personal and individual approach by telephone or e-mail.

Acquiring a new customer costs 6 to 7 times more than reactivating an old one.

All in all, the customer lifecycle has considerable significance in customer retention and customer care. If sufficient attention is paid to existing customers, and the right offers and ongoing communication are provided, new business can be generated much more easily than by acquiring new customers.

Let us advise you free of charge about the Customer Life Cycle with all its possibilities, measures and actions.