Ultimate guide to customer lifecycle management

There are some goals that just about every business strives to attain: attracting new customers, providing unparalleled services or goods, and building successful customer relationships that result in years of repeat business. Reaching these goals requires more than good intentions, though—it takes implementing a customer lifecycle management process.

This guide will help you understand what customer lifecycle management means, why it’s key to a great customer experience, and how to avoid common mistakes in developing a client lifecycle management process.

What is the customer lifecycle?

The customer lifecycle describes the stages a buyer goes through on their journey to making a purchase decision. The steps consumers follow in the customer lifecycle include:

1. Awareness

2. Engagement

3. Conversion

4. Retention

5. Loyalty

The data you collect at each phase of the customer lifecycle can yield essential insights for sales and support teams and illuminate opportunities for improving the customer experience.

Why the customer lifecycle matters

Think of the customer lifecycle as an arc that starts with a customer first learning about your company or products and builds toward the final goal: customer loyalty. This is vital to understanding the customer journey and ensuring agents have the necessary tools to provide the best support at every stage.

The customer lifecycle provides a complete picture of a business’s operations, too, allowing decision-makers to continue making smart business development and customer care decisions. It also helps companies identify areas of improvement and enhance the customer experience. For example, it can give businesses ideas on which resources to create so consumers can find the answers they need using self-service support.

What is customer lifecycle management?

Customer lifecycle management (CLM) is closely entwined with customer relationship management (CRM) and is ultimately a culmination of multiple customer-related metrics businesses monitor over time. It consists of assigning metrics to each stage of the consumer lifecycle and analyzing them to better understand performance.

What is the customer lifecycle map?

A customer journey map is a visual guide to help sales, support, and marketing teams understand customer interactions at each buyer’s journey stage.

The 5 customer lifecycle stages

The customer lifecycle outlines the path a consumer follows from their first interaction with your company to well after they’ve become a loyal customer. The consumer lifecycle occurs over five stages:

1. Awareness

All new customers start their journey at the awareness stage: when they first learn about your company and become interested in your products or services. However, consumers may be at different stages of customer awareness. They may be completely unaware or:

• Problem aware

• Solution aware

• Product aware

• Fully aware

Often, customers learn about the existence of new businesses through lead sources like:

• Social media

• Referrals

• Blogs

• Outbound sales

• Paid advertising

• Networking events

2. Engagement

The next stage in the client lifecycle is engagement. Sales-centric organizations may choose to use the term “consideration,” but since “engagement” is a broader term that encapsulates all customer interactions, it typically suits the needs of most businesses.

At the customer engagement stage, companies can engage with potential buyers by creating a solid knowledge base, providing a chat support option, and offering human touchpoints across the journey.

Here are some other ways you can engage with customers:

• Distribute customer feedback surveys

• Send push notifications

• Interact with followers on social media

• Send personalized messages on special occasions and milestones

• Provide customer support across several channels

• Use different mediums (like print and video) to distribute information

3. Conversion

The conversion stage (or purchase step) should be frictionless, with many payment options and as few steps as possible between the customer clicking “Buy” and receiving a confirmation email. You should also be transparent about pricing, returns, and refunds and make it easy for potential customers to reach out to your support team. In fact, 64 percent of customers spend more with a brand when issues get resolved on the channel they’re already using, according to the Zendesk Customer Experience Trends Report 2023.

When you connect your marketing software and tools with your customer service solution, your agents can use that valuable data to personalize conversations. For example, if an agent knows a customer has a loaded shopping cart or knows their past purchases, they can use those insights to tailor the interaction to the customer’s needs and drive sales.

To further boost conversions, you can try:

• Offering quick and easy ways to contact support on your website

• Arming agents with key customer context for cross-sells and upsells

• Creating relevant resources for each stage of the customer journey

• Sending customers proactive messages on your website based on user events and past interactions

“By having an agent reach out to customers proactively to address any questions or other obstacles to purchase (or even just say hello!), we determined our Spartan customer was 60% more likely to purchase than if we did not engage with them.” Aja Varney, Director of Global Customer Engagement at Spartan Race

4. Retention

The customer retention stage is where the relationship-building work begins. After you seal the deal with your new customer, customer satisfaction should be your top priority. When you create a positive onboarding experience and provide ongoing support, customers will be more likely to stick around.

You can forge long-lasting relationships by:

• Creating personalized customer experiences

• Adapting to customer needs

• Building customer trust

• Over-communicating about account-related updates

• Showing customer appreciation

• Providing post-purchase support

• Offering perks and discounts to loyal customers

5. Loyalty

Customer loyalty happens when all the aforementioned stages of the customer lifecycle come together. If you can successfully guide a customer through each stage, you will likely come out the other side with a customer who is a strong brand ambassador.

They will look to you for products or services they need while urging their friends and family to buy from you, too. A loyal customer is likely to become a lifelong customer. To show your gratitude to these customers and reinforce their loyalty to your business, you can provide incentives and customer loyalty offerings like:

• Points programs

• Tier-based loyalty programs

• Referral programs

• Discounts and early access

• Thank you notes

6 steps to manage the customer lifecycle

As you’ve probably noticed by now, the success of CLM management initiatives heavily relies on seamless cross-functional collaboration, well-defined business objectives, and a clear understanding of the customer. Below, we outline how to manage the customer lifecycle step-by-step and show you how you can create better customer experiences.

1. Define your ideal customer

Before you get too far into the customer lifecycle, you need to understand your customers, who they are, and whether they’re in the market for what you’re offering. You can do this by creating customer profiles for each customer segment you plan to target.

The “perfect customer” will look different for every company. You can define yours by first identifying which consumer characteristics matter most to you. These characteristics may include:

• A need for your product

• The ability to pay your prices

• Demographics (age, job title, industry, gender, etc.)

• Purchasing habits and buying power

• Pain points

2. Map the buyer’s journey

The buyer’s journey—sometimes called a customer or purchase journey—is the summation of all stages in the customer lifecycle. Visualize the journey consumers take before deciding whether or not to make a purchase. Map the customer lifecycle journey by:

• Setting business goals and objectives

• Building customer profiles

• Segmenting customers

• Using data to identify touchpoints and prepare informational materials

A customer lifecycle journey map can help you:

• Understand customer emotions, opinions, and pain points

• Predict customer needs

• Schedule essential touchpoints to progress the deal

• Identify decision-making factors

You should create unique journey maps and set different end goals based on the customer persona you’re assessing.

3. Identify CLM objectives

Set CLM objectives based on your business goals. These can revolve around capturing the attention of potential customers, drumming up interest, building trust, converting customers, or any other goal you have. You can use customer lifecycle data to:

• Understand customer actions

• Identify new customer touchpoints

• Predict how customer emotions impact purchasing decisions

• Assign key responsibilities to relevant departments and staff members

• Illustrate customer pain points and your business’s solutions

To get started, establish the metrics you intend to measure to monitor CLM performance. Here are some metrics you may want to consider:

4. Use AI and help centers to optimize the customer journey

When building a self-service help center, focus on creating educational resources to ensure customers get the most value from your product. You can publish self-service resources in a knowledge base or even build a community forum where your customers can discuss solutions with each other.

Another way you can provide better service is by optimizing the customer journey using chatbot and knowledge base metrics. You can use this data to create additional resources that answer commonly asked questions or help resolve customer pain points.

AI can help you:

• Make data-driven decisions about help center content

• Boost productivity and streamline support

• Provide faster resolutions

• Deflect support tickets so agents can focus on high-value tasks

5. Create customer touchpoints across channels

Omnichannel support allows agents to create customer touchpoints across multiple channels, ensuring buyers can access the support they need wherever it’s most convenient.

Here are some examples of where you can connect with customers at every stage of the customer journey:

• Social media

• Feedback surveys

• Self-service knowledge bases

• Customer loyalty and referral programs

• Website chat and SMS

6. Personalize customer experiences

Personalize messaging and create unique offers based on customer segments. This step is especially important at the retention stage, although you can use this information to create better customer experiences at any point. Use audience and data analytics to gain insight as to what the best offerings may be.

Customer lifecycle management best practices

Customers like knowing you’re committed to them. Customer lifecycle management analysis allows businesses to create consistent touchpoints, showing their focus is on supporting customers through every lifecycle stage. While nobody gets it right 100 percent of the time, companies that lose customers should revisit their customer lifecycle strategy and ensure it aligns with best practices.

Organize and unify customer data

The sales, customer service, and operations departments have their own KPIs, goals, and priorities. People can get so focused on their jobs and metrics they forget about the customer. That’s why companies with high scores in each department can still lose customers.

To prevent this from happening, cross-functional collaboration needs to be a priority within your organization.

As you prepare your sales and support teams to assist customers throughout the entire buyer’s journey, it’s crucial to have a reliable, customizable support platform with a unified customer view. Use a customer database or CDP to track customer data and share contextual information between departments.

You can organize customer data by:

• Utilizing a CRM

• Tracking the interactions of your contacts

• Eliminating duplicate records

• Establishing an orderly onboarding process

Develop offerings based on customer segmentation

You can create customer segments and extract behavioral data to customize sales and support standards and conceptualize unique business offerings like:

• Promotions

• Hyper-relevant solutions

• Discounts

• Tailored resources

• New products

Integrate your tech stack and act on data

A customer lifecycle management strategy needs to have the technology that enables teams to keep current data, interpret it, and act on it at each stage in the customer journey. Support automation and CRM software must provide access to customer data that can inform customer retention behaviors at every stage.

The solution is data.

As Jen Spencer, a Forbes Business Development Council member, wrote:

“If a lead is ready to become a customer, marketing must be ready—both operationally and technologically—to seamlessly move that person to sales.

Similarly, if a customer has a sales query via live chat that customer service isn’t equipped to answer, it must be empowered to get someone on the conversation who can. The customer experience will suffer if customers don’t get the support they need in a timely and direct way.”

It’s crucial to make sure the technology of different departments rely on work together and provide them with the same picture of who the customer is and what they need. The newer term for this is “RevOps,” or revenue operations.

A “Customer lifecycle manager” is another common title for the person who breaks down silos and provides the company with a clear view of the customer.

What is an example of the customer lifecycle?

Engaging customers throughout the entire buyer’s journey is no small feat. You will need to take numerous actions and nail touchpoints. Here’s a real-world example of how businesses can use support software to provide better customer experiences and retain customers.

The Boston Globe

New England’s trailblazing newspaper, The Boston Globe, partnered with Zendesk and Ada to introduce an AI-powered chat solution that kept support costs low and customer satisfaction high.

• Stage: Customer retention
• Pain point: The Boston Globe wanted to enhance the customer experience, ensure readers could get support at any time, and stay relevant amid a rapidly changing media landscape.
• Solution: Deflect call center traffic by delivering 24-hour support to customers using AI chatbots.
• Results: This solution resulted in increased revenue generation, better customer retention, and higher CLV rates.

The Boston Globe continues to work with Zendesk to boost customer retention and garner loyalty through chat innovations.

Commitment to customers at all stages

Manage the customer lifecycle and enable your team to create better customer experiences by developing support strategies for every stage. With Zendesk, you can assess consumer behavior and make data-driven decisions, boosting business profitability and customer happiness

Learn more about how Zendesk enables support teams to provide outstanding customer care across multiple channels and empowers customers to utilize self-service resources for faster resolutions.