Why use lifecycle marketing?
For many companies, the current recession has made one fact very clear: doing business the same way it used to just won’t work. Old sales and marketing methods are too inefficient, too expensive, and can pose a risk to the business itself. Putting off a change in marketing strategy for another year is no longer an option. Web advertising, direct mail, email, social media, traditional and digital should be in the marketing strategy of a company. Bottom line: Lifecycle marketing ensures that companies get the right message, to the right person, using the right media, at exactly the right time.
Consider the following:
“Buying decisions include many factors that most consumers do not even know about. Almost all purchases made include five steps: recognition of need, search for information, evaluation of alternatives, purchase decision and, finally, post-sale behavior. the purchase. Even the simplest purchases can include any or all of these steps. ” (Brown, 2005)
“Shopping is even more influenced by personal, psychological and social issues. A good market researcher will study the thought process that consumers experience, compare it with their demographics and use the resulting information to market their products.” (Armstrong et al, 2005)
Marketing factors: consumer buying behavior
February 01, 2006 by SL O’Brien
Lifecycle marketers use analytics to predict when customers are most likely to buy. They then come up with incentives meant to encourage the consumer to buy from them. Time and message are key. Rather than spending money on marketing trying to reach a large audience, many of whom have no interest in the offering, the lifecycle marketer targets an audience where they are most likely to be successful.
The benefits of a lifecycle marketing strategy extend beyond the highest conversion rates. Collecting useful and measurable data will allow a business to develop trends, segments, and patterns of behavior that can be used for more precise targeting. Therefore, marketing efforts will become more specific to the needs of consumers. Your level of trust and appreciation will increase, improving loyalty and promotion soon.
What is lifecycle marketing?
Lifecycle marketing transcends traditional thinking about customers and prospects. Rather than focusing on individual campaigns targeting the masses, lifecycle marketing considers the individual customer / prospect, taking into account where they are in relation to the sale and communicating with them accordingly. To be effective, a lifecycle marketing strategy must capture customer feedback as it moves through the lifecycle stages: reach, acquisition, conversion, retention, and promotion.
1. The scope phase is the starting point. Reach refers to the potential target audience. You can relate to both current clients and potential clients. Reach is what advertisers and marketers do to get your attention. It’s getting in front of potential customers, turning them into prospects. The scope can be exciting. It’s the glitter, the ad, the website, the surprise, the bang. Reach works best when customers understand a company’s brand, service, or product.
Reach will target the audience at a point where they are most likely to be affected by the message. Advertising, direct mail, variable data direct mail, social media, email, or other methods can work well. Unlike many campaigns, all the methods used during this phase will be coded and measured. The ultimate goal of outreach is to acquire leads, but if that doesn’t happen, Reach will collect valuable information to use in future campaigns.
2. The objective of the acquisition phase is the participation of the client. Did the potential customer interact with the company? Did they walk into the store, call, email, visit a website? The acquisition of a prospect occurs the moment a prospect shows interest. We know how they responded (for example, sign up for a newsletter, fill out a credit application, take a survey, request a coupon, download a demo, or any other action). We have a bona fide prospect, but the possibility of making the sale may still be in doubt.
Acquire will define the methods and processes necessary to handle this phase of the customer life cycle. The answers will be personalized (age, gender, point of interest and others), using the information obtained from the potential client. As in the Scope phase, the entire Acquire scope will be coded and tracked so that trend data can be collected.
3. The conversion phase is the point at which the sale is made and the potential customer becomes a customer. It may take several actions on both sides of the process before the prospect converts.
Convert is the phase where customer segmentation begins. What did you guys buy? Where they live? What additional products or services did similar buyers buy? Age, gender, purchasing power, need for additional services, and other factors determine your next step as a marketer. The closer a company gets to its customers at this point, the greater the opportunity to sell them again.
After all, it is more efficient to keep existing customers than to constantly search for new ones.
4. The retention phase is the process of nurturing the relationship and encouraging repeat sales. It is much easier and less expensive to sell additional products and services to an existing customer than it is to find new potential customers.
Current customers have already made the decision to buy. They already have a relationship with a company. They have decided to trust a sales team, product or process. The importance of maintaining, if not improving, this confidence cannot be underestimated.
Retain is where the Life-Cycle Marketing strategy really improves business. Knowing that the customer will deviate if we neglect it, it is imperative that we stay in touch. Working closely with management applications to create trend models and tracking mechanisms will help a business retain customers.
5. The Promotion Phase is the end of the cycle, which gets business off to a better start. These potential customers have a friend’s word, a loyal customer, fresh on their minds.
Clients with the highest lifetime value are those who advocate on behalf of a business. They tell their family and friends. They suggest products on social websites. They run fan clubs. They get a company logo tattooed on their bodies. Ask Harley-Davidson how it’s working for them.
Promotion is simply the best possible marketing tool. Advocates will get the attention they need and, if necessary, the tools to do what they do best … sell a business to their network.
How does a business use lifecycle marketing?
Once a business has decided to pursue a lifecycle marketing strategy, it must have a clear understanding of each phase of the process. Each phase of the strategy builds on the previous phase, creating a continuous cycle with anticipated expectations and measurable results.
• To successfully begin putting a lifecycle marketing strategy into action, marketers must have a clear understanding of their current business state and long-term goals.
• They need to capture the correct data to identify their profitable and unprofitable customers, understanding their behavior in the face of offers, incentives and messages given. With that information, they should structure a plan to contact customers at the sweet spot when they are ready to act.
• Marketers must have an active tool that allows them to compare results with objectives and act accordingly.
• Test, adjust, measure, act. Then test, modify, measure, act. It’s a never-ending process, but isn’t that true of all marketing? The difference is that the decisions made in a lifecycle marketing program are based on facts, not hunches or wishful thinking.
To get the maximum benefit from a lifecycle marketing strategy, marketers must:
- Use the lifecycle stage as a means of limiting data collection.
- Create rules and people for each customer segment.
- Stop thinking about the campaign, start thinking about building relationships.
What about the impact (ROI) of a lifecycle marketing strategy?
Like any other investment a business will undertake, lifecycle marketing must be implemented with clear goals and expectations for the return on that investment. Unlike traditional thinking in which an offer is submitted and the direct result of that offer is measured, Lifecycle Strategy looks at the big picture. As the strategy itself implies, marketing takes place during the customer’s life cycle. In the same way, ROI must be evaluated in the same period.
Findings from a study by about.com
• Regular customers spend 33% more than new customers.
• Referrals among regular customers are 107% higher than among non-repeat customers.
• It costs six times more to sell something to a potential customer than to sell the same thing to a customer.
Like all good relationships, lifecycle marketing relationships take time to develop and their value must be evaluated over time using a variety of measures. Doing this isn’t always easy, but for companies that embrace this strategy, the rewards are well worth the effort.