The Customer Life Cycle is a concept that marketers and entrepreneurs should know in order to maintain the good performance of their business.
Customer life cycle pertains to the sequence of steps that a customer usually goes through when deliberating, buying, utilizing and sticking with a product or a service. According to Jim Sterne and Matt Cutler, two marketing analysts, the cycle usually consists of 5 key steps: reach, acquisition, conversion, retention and loyalty.
In every business, collecting data using these steps is imperative in order to predict what the customer is going to do. This will allow you to predict your sales in the next coming days or months. It also allows business owners to come up with strategies that can re-capture the interest of consumers.
An ellipse is usually used to represent the life cycle of a customer. Because it is a cycle, there is a good possibility that you can save consumers who are already starting to lose their interest in the products and services you are offering.
The life cycle approach has been one of the most effective strategies used by many businesses such as home shopping channels and catalogs for many years already. You would think that with the explosion of online markets, the TV home shopping and catalog business would die a natural death.
But these companies used the Life Cycle approach to increase their profits and get back the customers they have lost. That being said, this method has been tried and tested already.
Some of the questions answered by understanding the Life Cycle approach are:
- What are the long-term effects of our products and services on customer values?
- How can changes in company implementations, pricing and operations affect the buying decisions of customers?
- When will customers lose their interest in buying the products and services we are offering? How can we prevent this from happening?
- Which customers are more likely to stick with the services and products of our company?
The thing about this cycle is that it is easy to implement in business. It is also cost-effective so it works especially if you do not have a lot of capital. When you are trying to sell stuff on the internet or merely offering your new company’s services, make an elliptical illustration of this cycle first.