You have spent time, effort and marketing budget finding that account, identifying who’s who and driven them successfully from the top of your sales funnel, all the way through to the bottom and money has changed hands - but what happens next? There’s always the next step - it’s just that many companies, perhaps your competitors, have forgotten that.
I don’t mean that the goods or services are delivered and installed to the customer’s satisfaction or that the invoice is presented once the customer is happy – I mean how are you going to keep them engaged and interested in your company?
How will you generate the next purchase from them, keep them as a customer and get them to a place where they become an advocate for your company bringing more business through the door?
They work hard to sell their product then a customer buys it then they let that customer interest and relationship die and move on to the next person. A little like saying “Thanks for the money sucker, see ya around….”
With the costs and nature of customer acquisition these days, why would you abandon the relationship at that point where you’ve spent a lot of energy and budget to create it in the first place?
Then, later on, those type of companies return to that initial customer mentioned to generate some new business and are surprised by the frosty reception. How can you expect a customer to buy more from you if, after that initial purchase, you haven’t nurtured or engaged them preparing them to make next purchase? You can’t expect to win the election if you don’t have a campaign, can you?
Let’s not forget that there are many competitors fighting for the same customers and the old saying “Look after your customers or someone else will” rings true more than ever in today’s economic landscape.
There’s a very real impact on your marketing budget and bottom line in this context too – if you don’t engage with your customers and there’s a large gap in time before you come asking for more money, they aren’t going to stay with you and you have a retention problem.
If you have a retention problem, then you have to spend significantly more on customer acquisition which is 5-6 times more costly than keeping an existing one. Acquisition costs spiral upwards while retention figures dive-bomb. And by the way, don’t fool yourself thinking retention levels are fine as bookings are level year on year – compare the names of the customers you had last year and the ones you have now. You might just find you’ve been replacing the revenue with new customers but churning existing customers at a high rate.
Let’s not forget that there’s also natural attrition of customers - so how do you run a business model that deals with before, during and after the sales funnel?
A good customer lifecycle is a critical part of forming the overall customer experience which not only maintains the relationship(s) but also works for you in supporting retention, upsell and advocacy.
Its ultimate goal is to increase the customer lifetime value (LTV) over the time they spend with your company as a revenue-generating customer.
(LTV = The amount they spend with you during the longest likely time they will use your product or services. E.g. If they buy something worth £50 once a year and stay with you for 5 years then the LTV can be viewed as £250 – however if during that period they recommend 2 other people and they, in turn, buy something, the connected value is higher – in this example 3 times larger)
Each company is of course, unique however the business engagement is similar and so we will look at a higher-level model. Before endeavouring to put your own model in place there are a number of elements to examine usually brought to light through a touch-point analysis.
The lifecycle runs from first contact and through the sales funnel but for the sake of this blog let’s start immediately after the sale.
So now that the customer has bought your service or product; is your traditional next step an invoice or do you write to them a Welcome email/Letter and thank them for the business and provide them with all the related contact information they need to connect to the right people in your organisation?
Have you made sure they can access the online resources they may need for self-help or provided useful documents to make their life easier? The right approach is to onboard a customer in a structured way as it is one of most important parts of their entire journey. As they say, you never get a second chance to make a first impression.
Next, particularly if you have sold a consumer product, is to ask them to review it publicly on the likes of TrustPilot, ReeVoo, BazaarVoice, ePinions etc. after a short period of time (one month perhaps) so they still remember why they made the decision to purchase and when they are most likely to be positive. It also gives you an opportunity to check that they are happy with the purchase and remedy and initial problems they are experiencing. If they are B2B customers, rather than a product review it is better to start the process of seeking a case study or positive quote that will need to go through a longer approval process internally in their organisation.
From this point onwards (until the next desired sale) you should be looking at how you can programmatically move the relationship forward and consider (if you haven’t already) how you deploy a marketing automation system which can help you implement a communications strategy which is timely, relevant and integrated to your CRM system.
Regular communications which keep the customer up to date with your business offerings, educate them about issues which your solutions can support them with – all of which need to be relevant and personalised to be of use. Many companies publish a regular newsletter to keep customers up to date while others do this through the clever use of social media on a continuous basis.
Getting customers to fully explore products and services so they understand the true value and buy again can be assisted by providing short-form communications such as hints & tips that point out specific areas which may benefit them.
Closer to the next review period or purchase, a customer will be justifying their purchase again and this is a good place to use a scorecard of recorded information so that they will be reminded of the value you are providing. When generating a score-card you should consider what your product or services do to meet the KPI’s that concern the customer most – for example are they reducing costs, increasing profit or gaining new customers because they become your customer? Are there other specific measurements that can be attributed to using your product or service you can highlight to support a decision to buy more or repurchase at the next opportunity in a cycle?
Other customer successes are useful to communicate if they are relevant – for example if you have a customer in the financial market who has used your product and seen great results then it’s very likely that others in that market would be interested and perhaps inspired to look more deeply at your company or try something they haven’t looked at before.
Not only do we need to communicate to customers but we also need to listen to them as well in many areas of the business. It’s not just the responsibility of the account manager or sales people. There are many tools available at your fingertips to help you do just that.
When’s the last time you checked the reviews people are giving your product? What are they saying about you on Social Media channels? Your customer service team can be a priceless source of information which may help you streamline processes and improve what you do already. Let’s not forget surveys – you should consider surveying your customers at least annually to understand more about they are having with your company, products and services.
If you sell indirectly through a dealer or partner channel, you may already have an event which brings people together to update them on the company’s innovations and changes so you could also use smaller groups to help critique how you do business and how you could make it easier for them.
The same is true for your customers, whether they bought from you directly or indirectly. Why not invite their top management to a similar event to help you design the future services and products after all they know more about the problems they are trying to solve than you and may provide fantastic inspiration for lucrative innovations.
Part of the review process within any company when they consider what they have witnessed and learnt over the past quarter or financial year should bring together the right people from cross-functional teams to provide different perspectives providing a more holistic view of what’s happening in the customer lifecycle.
For example; sales can talk about their win/loss analysis which can shape the development of products, customer service can relate the experiences of customers and what the top issues are, marketing can paint a picture of customer markets and research available and management can share their vision and strategy. All of this information, in combination with input from your customers and channel, can shape the way you move forward and optimise what you are doing.
As we near the end of this part of the customer journey in the customer’s lifecycle, there are still a few business critical steps still to go before the next purchase. I mentioned a scorecard earlier on and how they can help a re-purchase or incremental purchase order.
Before using one in advance of an annual purchase, for example, you’ll need to ensure that the customer has the latest and greatest version of your product or that the service is bringing results and that customer service issues are solved otherwise your scorecard and their version of events will not be aligned.
So timing the final scorecard, latest newsletter or social media post aimed at a customer segment or specific account, needs to be synchronised for maximum effect and then there needs to be a pause – a nice quiet uncomplicated silence where sales can do their job of securing the next desired purchase order.
This is where any marketing or promotional distractions are unwelcome and can confuse customers and stall ordering. So plan for a lull in activity for a customer who is due to make a regular or planned incremental purchase.
And then, when the customer or purchases again whether that’s another year of service or product, we can loop back to where we started this article by thanking them for their order and on-boarding them again but this time knowing them better and shaping the communications in a much more personalised way.
To summarise the customer lifecycle following the purchase (at a high level), it should run as follows;
The customer lifecycle actually spans the period before purchase and after re-purchase. It also needs to cover the possibility that some customers will not repurchase so there has to be a plan for that. It’s called the “Win back”.
In the mean-time ask yourself those questions I’ve posed above. Have you structured your communications with your customers? Deployed any checks and measures? Read what they think about you and your products? Listened to what they have to say?
If you do, then you will be even more successful, if not, then not start today and avoid the pitfalls and costs of an imbalanced customer acquisition/retention equation where you spend more replacing customer than keeping them.