CRM has made huge strides in the past few years for customer retention. . Starting out as simply a contact management tool, then progressing to a sales automation tool, you can now define CRM as a full-blown customer satisfaction system. Businesses have begun to realize that winning the first order is only a fraction of the revenue and profit potential from that customer. Maximizing the full potential of the customer requires careful management of each interaction with the customer along the entire lifecycle. In the end, managing the stages of the customer relationship, will build not only financial rewards, but deeper customer loyalty.
What is customer life cycle management?
Your customer interacts with your business many, many times during the life of your relationship.
- they visit your web site to learn about your offering
- speak to a sales person for more detail
- attend a product demonstration or webinar
- chat with support on questions or problems
- speak with a service rep to have their products repaired
Each of these interactions is an opportunity to build loyalty, and to gain additional revenues. Everyone knows that it is far easier (and less costly) to build revenues from existing customers than to attract brand new prospects. And, most importantly, it is easier to sell the customer a replacement/upgrade when you know their needs, expected timetable, and level of satisfaction.
Customer life cycle management is the process of managing each of these interactions to produce a loyal, satisfied customer. The end result is improved revenues and profits for your business.
Let’s take a look at a typical customer life cycle:
- Attract Traffic. This includes all of the activities that you do to generate traffic for your products or services. These include items like website traffic, advertising, webinars, email campaigns, and more.
- Capture Leads. Once you’ve attracted traffic, it is critical to capture their contact information. You need an offer that prospects will value, and is worth their effort in completing the contact form.
- Nurture Prospects. Once you have their contact information, you can now begin the process of leading them towards a sale. Each prospect can have a different need and a different timetable . CRM allows you to segment prospects by need, by stage in the buying cycle, and by timing of intentions to buy. You can effectively walk the prospect to a sale at the pace they need.
- Convert Sales. Once a prospect has become convinced of the need for your products/services, you need a mechanism to close the sale. This can be automated with ecommerce, or handled by your expert sales team.
- Deliver & Satisfy. This is the stage where many companies fail to realize the value of the customer life cycle. Your ability to deliver and satisfy the customer will directly determine your success in up selling, cross selling and replacement selling. What are you doing to make sure that every new customer is completely satisfied by you? Do you have a tool to know exactly how your customers are being treated?
- Up-sell Customers. Since it’s less costly to sell products to existing customers, what are you doing to raise the level of existing customer satisfaction and loyalty? Having a successful relationship with your customer not only makes it easier to sell, but also provides intimate knowledge of when they might buy.
- Sell Replacement. The best signal that your customer life cycle management is successful is a high incidence of replacement/upgrade/add-on sales. This becomes a high vote of confidence that you are satisfying all their needs with your products, services, and delivery.
- Get Referrals. A last signal of your success in satisfying the customer lies in the number of referrals that they provide you. No one refers a product or service to a friend or colleague unless they are happy with it.
How can customer life cycle management help my sales team?
Let’s discuss an example. A current customer is working through an installation problem with your help desk. Your customer is concerned. Your sales department is about to contact with the customer for additional units of the same product. Would your approach be more successful if the sales department knew about the installation problem? Might the sales person help to correct the situation through knowing about it?
Let’s take another example: Your service department has completed a service order for a customer’s older piece of equipment. The service person notes the equipment condition in an incident report. Do you think that sending a periodic condition report to marketing might help them to focus their efforts to sell replacements?
How does customer life cycle management help my customers?
Having a complete view of the customer can be invaluable in maximizing your relationship. Offer them the types of products, services, and solutions that make sense for them. Imagine taking a proactive stance, and offering your customers solutions before they even knew they have a problem. Imagine knowing everything about that customer no matter whom they touch within your organization.
How does customer life cycle management improve my processes?
Another benefit of customer life cycle management is that it continuously improves the processes of your business. Since it offers you a full picture of every internal process, and how it impacts customer satisfaction, you can quickly see where there are repetitive problems. You can catch problem trends before they damage your company’s reputation. For example, are customers repeatedly calling about an installation problem on a particular product? What if you could update the installation instructions and eliminate the problem before anyone else experiences it? Is a service agent being non-responsive because of a lack of information? Good customer life cycle management can identify and resolve these harmful situations.
What are the benefits of customer life cycle management?
- Present one high-quality face to the customer
- Cross selling and up-selling opportunities
- Lower customer acquisition costs
- Elimination of non-collaboration silos
- Lower customer churn
- Higher customer loyalty