The Ultimate Guide to Customer Lifecycle Management & CEM

Posted on May 14, 2024 in Economy

What is CLV?

The lifetime value of a customer, or customer lifetime value (CLV), represents the total amount of money a customer is expected to spend in your business, or on your products, during their lifetime.

When to Use CLV

• To identify which customers are worth acquiring and retaining.
• To determine where to target marketing programs to maximize the firm’s return on marketing investments.
• To understand the “true” value of a customer to a firm, including both revenues and costs.

5 Phases/Stages of the Customer Lifecycle

1. Awareness

The first stage in the customer life cycle is the awareness phase. This is the point where a consumer first becomes aware of your business offerings. For example, they may use a search engine like Google or DuckDuckGo and come across your business in the search results. Other common means of discovery are for the consumer to see an advertisement for your business or get a referral through word of mouth or social media.

2. Consideration

In the consideration stage, the consumer has discovered your business and is now collecting information to weigh the pros and cons of your offerings. Sometimes, this assessment is against your competition.

3. Purchase

Here, we arrive at the point where a prospect becomes a customer. They’ve evaluated your offerings and decided to buy from you. BUT, it’s selection in your website’s digital shopping cart. It is STILL possible for a customer to abandon theirs, so, take a look at your purchase workflow and track how many customers drop off before the purchase is complete.

4. Retention

The retention phase is all about deepening the relationship with the customer after the purchase so that they are more likely to buy from you again.

5. Advocacy

The last stage is when a customer becomes so fond of your organization that they become advocates for your brand. They tell friends and colleagues and recommend your business to others through online reviews.

What is the Difference Between Buyer/Customer Journey and Customer Lifecycle?

The buyer/customer journey is the sum of all experiences a typical user has during their encounters with your brand.

Whereas the customer lifecycle is your framework for understanding the typical progression of an existing customer.

How to Manage Conflicting Situations with the Customer

1. Allow the customer to vent their feelings
2. Give them your full attention
3. Never interrupt
4. Let them continue
5. Make eye contact, be alert and show empathy (in person)
6. Empathize making indications (oh!!) (on the phone)
7. Leave a silence and then thank them for their complaint
8. Offer a solution

Omnichannel: Integration of Media and Channels

Why is it More Important Today Than Ever?

The customer is different, more demanding, less loyal… For this, it is important that companies like Amazon and Facebook seek to improve the customer experience, and besides, making this experience comfortable for the customer. For that, we must use omnichannel.

Omnichannel is the intention to unify all channels in which a brand or business is present in such a way that the customer does not appreciate differences between them all. This way the customer can adapt to the medium that suits them best. This will help improve the customer experience.

The Two Main Advantages of Omnichannel

Brand Image

• Customers appreciate the flexibility with which the company operates.
• It makes it easier for them to communicate and purchase.
• It manages to improve the shopping experience and consequently improve the reputation of the brand.
• We can retain and gain greater market share as well as more prestige.

Productivity

• You have full and absolute control of the stock, as well as the processes of purchase and management of the information.
• More consumption by the customer
• You can work with fewer material and human resources
• The customer’s shopping experience will be an experience.

CEM: Customer Experience Management

What is CEM?

CEM or Customer Experience Management is the science and art of managing experiences and building emotional bonds between individuals and organizations.

What’s its Goal?

Generate an emotional link between the user and the organization that impacts the future behaviors and decisions desired by this organization. Call centers are becoming more and more automated. However, the customer experience is most users prefer to keep talking to but this will change with the improvement of virtual assistants.

4 Examples of Neuromarketing

1. Color psychology can influence a consumer’s choice
2. The direction of a face in a photo can help point eyes to the intended section
3. Audio branding can help develop the brand image.
4. The right fonts can help convey your message

What is Customer Churn?

Customer churn is the percentage of customers that stopped using your company’s product or service during a certain time frame.

NPS (Net Promoter Score)

NPS is the most widely used customer satisfaction metric worldwide.

There are 2 types:

• NPS Transactional (provides customer experience data at certain stages of the journey).
• Relational NPS (measures full experience)

The NPS measures what the customer feels about your business, with just one definitive question: “On a scale of 0 to 10, how much would you recommend Company X to a friend or colleague?” The answer can generate valuable feedback for your business.

Loyalty Program

Fidelity programs are a marketing strategy established by a company with the purpose of rewarding the buying behavior of its customers, which produces in them a sense of loyalty and loyalty to the company.

Why Should I Put All Our Effort into a Loyalty Program?

• Improve income
• Maximize your return on investment
• Retain customers

The more the customer actions their purchase intent, the more rewards they will receive, which will result in them still purchasing. Provide information about the behavior of your niche market. You’re going to understand their behavior about what they avoid buying and what induces them to spend their money.

Maximizing Customer Value: CRM

What is CRM?

It is a term that refers to the practices, strategies and systems that companies use to manage and analyze interactions with customers.

The objective is to improve service relationships, build loyalty and boost sales, grouping names, emails, telephones, tastes… all data we are willing to collect.

Basic Premises of CRM

• Customer knowledge is valuable and can be used to develop specific customer strategies
• Technology can be used to gather this knowledge and manage customer relationships

Levels of CRM

Analytical CRM

• Generates Profiles
• Identifies behaviour patterns
• Supports customer segmentation

Operational CRM

• Customer contact management
• Dealing with enquiries

MKIS

• Sales force
• Accounts and invoicing
• Operational procedures
• External research companies
• Customer help lines and after sales
• Environmental scanning SWOT

CRM to CMR?