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Customer lifecycle management is a comprehensive strategy to maximize engagement with customers and increase profits.
This guide illustrates best practices with examples from Target, Sephora, the NBA, Uber, and more. If you'd like to skip straight the customer lifecycle management examples, click here.
Otherwise, read on to see what we mean by customer lifecycle and the 5 best practices eCommerce brands should follow in constructing their own strategy.
What is customer lifecycle management?
Customer lifecycle management (CLM) is a strategy focused on creating relevant messages triggered by customers moving into, or being in, a particular stage in the customer journey.
CLM derives it's name from identifying key "stages" in the customer journey. Customer "engagements" are developed for each stage. Engagements could be triggered messages, emails, offers, on-site personalization's, or other forms of communication with the customer.
Typically, customer lifecycle marketing messages are triggered, either taking or not taking a specific action.
Messages can also be triggered by a customer's status, belonging to a certain stage.
CLM is said to be customer centric, or customer led, because customer engagements are triggered based off of customers' actions or inactions.
While industries and businesses differ on which customer stages are important to them, generally they hit across five basic stages of a customer lifecycle. These are customer acquisition, engagement, retention, and loyalty.
Customer lifecycle management (CLM) best practices
Below is a short collection of customer lifecycle management best practices.
1. Unify and standardize customer data
Gathering data is the first challenge in successful CLM. The second challenge is unifying it.
Too often data gets siloed in their own systems. A web analytics platform for web, social and ad dashboards for acquisition, or a CRM for current customers, are a few examples of stage specific tools.
Luckily, this issue is being addressed. It is becoming standard for tools to expose APIs and allow brands more access to the data in non-proprietary formats.
Still, it is incumbent on brands to take action.
It is very likely that you will not only need to gather the data into one place, but unify it in a standard format. We recommend using a central customer data platform such as Barilliance for this process.
Customer Data Platforms like Barilliance allows you to connect customer data in one place. Demographic, psychological, and most importantly, behavioral data can then be used to create relevant offers in all stages of the customer lifecycle.
2. Define key metrics for each stage
Metrics let you know if you are being successful or not.
Unfortunately, defining which metrics to choose is difficult. We've written before about the nuances in selecting the best KPIs for eCommerce here.
However, below are some of our suggestions for each lifecycle stage.
3. Behavioral Segmentation
Once you have your data gathered in one place, you need to begin applying segmentation techniques to understand the various customer segments your business interacts with.
Segmentation lets you understand how customers behavior differently. For a detailed look in how to apply behavioral segmentation in an eCommerce setting, look at this guide on RFM segmentation and this guide on eCommerce behavioral segmentation.
4. Understand customer stages with cohort analysis
With both your segments and KPIs defined, it is not possible to perform a true cohort analysis.
We've showcased how eCommerce companies can use cohort analysis here.
In short, cohort analysis uses behavioral segmentations to understand customer behavior over time. The behaviors you are interested in are the KPIs you defined in step 2.
Cohort analysis really is the only way to accurately estimate CLV on an ongoing basis and optimize for various stages - from understanding which acquisition channels are most profitable to how effective your loyalty program is at manufacturing sales.
5. Create compelling offers for important segments across your customer stages.
Finally, the last step is creating compelling offers.
Once you understand which customer segments and stages are important for your business, you want to begin creating tailored incentives to move customers through the customer journey.
To help illustrate, the next section is all about customer lifecycle management examples.
Above, Starbucks helps move customers who purchase their grocery items into their Starbucks Rewards program.
Customer Lifecycle Management (CLM) Examples & Tactics
Below we have gathered a number of customer lifecycle management examples, grouped by their associated customer lifecycle stage.
Customer acquisition stage examples
Customer acquisition is the process of moving an unknown visitor into a known first time customer. Some brand split this stage up further, allowing customer acquisition to be defined as a micro conversion such as a newsletter signup or social follower.
1. Convert first time visitors with welcome campaigns (ft. Sephora)
Effective welcome campaigns introduce new visitors to your brand, actively removes barriers to first purchases, and gives a reason for visitors to make a purchase now.
One of our favorite examples comes from Sephora. Their first email does an excellent job showcasing the benefits of joining their newsletter, while at the same time giving reasons to join their VIP and Rogue loyalty tiers.
2. Use free trials to convert subscribers into buyers (ft. NBA)
What do you do when customers don't convert on the initial welcome offer?
This is a primary use case of customer lifetime management. Often, these visitors represent significant investment to bring them to the site and getting them to sign up. Offers should be constructed to re-engage prospects and move them from a known subscriber to a customer.
Below is a customer activation campaign example from the NBA, promoting their NBA League Pass product. The offer is straight forward, timely, and has a tight expiration window.
3. Using discount campaigns to drive subscribers to first time customers (ft. Stitch Fix)
Another customer activation campaign variation is discount campaigns. Here, after a customer rejects an initial offer, brands sweeten the deal by adding a coupon, gift card, or discount code.
Below is an example from StitchFix. After a customer has taken their fit assessment, they are presented with an option to order their first "fix".
However, if a customer decides to not follow through with a purchase, Stitch Fix begins their customer activation campaign. Here is one email in the sequence, offering a $35 credit to be used.
Above, Stitch Fix credits a new users account with $35. They increase the chance of a customer taking action by placing a time limit on when they can use the credit.
4. Use browse abandonment personalization tactics to convert visitors in-session (ft. FSA store)
The majority of your visitors will not make it to the checkout page.
An established browse abandonment strategy is a fundamental part if CLM, typically used in the earlier customer stages. Here, FSA recognizes a customer action to leave the site without adding an item to their cart.
They interrupt the sequence by presenting a simple popup. In this case, they use a straight forward reason to continue the transaction - a $25 discount. In addition, they give a free piece of content to help educate the visitor on what types of products are eligible.
Customer engagement stage examples
Customer engagement refers to getting customers to take desired actions after they started the customer journey with you.
Some brands prefer to think of this step as "activation". In this case, the acquisition customer stage is thought of as getting an anonymous visitor to a known prospect, with this stage moving the known prospect to an established customer.
Here we will broaden the definition to include tactics that prompt ongoing engagement with your brand.
5. Use product recommendations to suggest bundles (ft. Fashion Nova)
Bundles are an excellent way to simultaneously create more value for customers and increase profitability.
Leading eCommerce stores use recommendation widgets to suggest possible combinations for customers. Below is an example from Fashion Nova.
When I navigate to the jean item, I am also presented with the option to add the entire model's outfit to my cart.
By using both merchandizing and their product catalogue, Fashion Nova is able to increase conversions and AOV at the same time.
Below, Target provides a more sophisticated example, creating multiple looks for the currently viewed product. Again, these accessories can easily be added to the customer's cart, and allows the customer to better visualize how they will use the product being considered.
6. Engage with customers after adding to cart to improve AOV (ft. Target)
Another common trigger for lifecycle customer management is the moment a customer adds an item to a cart.
This is a high signal action. Based on the item, brands can anticipate what other items they may like, and are able to create a dynamic, highly relevant offer.
Above, Target recognizes the customer adding an item to their cart, and triggers a personalized offer of products frequently bought together.
7. Customer life events as triggers (ft. Target)
Customer "life events" are a great example of customer lifecycle management. Using knowledge from previous customers, brands can anticipate what customers need on an ongoing basis.
Below is an example from Target.
Due to past purchases, Target is able to segment this customer as a mother. With this information in hand, Target can present hyper-relevant offers and spur repeat purchases. Target optimizes the chance for success by
8. Email My Cart Customer Engagement
In our studies on most effective triggered messages, we constantly find "Email My Cart" style messages to outperform all others.
Email My Cart messages are triggered when a customer has added an item to their cart, but they leave the site before accessing the checkout page.
9. Incentivize product expansion with existing customers (ft. Uber)
Your current customer base are your best prospects for new product categories.
As part of the engagement phase, brands should continue to educate customers on product development. Uber offers a great example.
While the brand began as a transportation service, they have since layered on additional products. One of those is Uber Eats, a food delivery service.
As part of their customer lifecycle management process, Uber segments customers who have used their transportation service but haven't made their first order on Uber Eats.
They remove all barriers to trying it out, offering a full $30 off your order, making many meal options free.
10. Reduce promotional spend on repeat orders and reactivation campaigns (ft. Instacart)
Unfortunately, many brands resort to discounts, increasing their promotional spend, when lower cost options are just as effective. Customer lifetime management lets you identify the parts of your customer base that merit a discount incentive, and those that do not.
Instead of resorting to discounts as a first measure, you can use them more strategically. Below, Instacart provides a great example of using customer lifecycle management to limit their promotional spend.
These emails are part of their re-engagement campaign. Notice first they offer other incentives, such as free delivery. The discount is only offered after a customer has chosen not to convert the "naked" offer.
Customer retention stage examples
11. Triggering repeat purchase incentives on post purchase customer actions (ft. Ace Hardware)
Post purchase flows are an integral part in retaining customers.
Post purchase flows can be used to educate customers on how to get the most out of their product, share add-ons for their recent purchase, or give customers a reason to come back.
Below, Ace Hardware uses a direct mail coupon after an in-store visit.
After making a purchase, they send out a "bonus" $5 reward with a relatively short term expiration date.
12. Creating customer retention with in-store currency (ft. Kohl's)
Another way to wrap monetary discounts for repeat purchases is through store currency.
From a customer lifecycle management perspective, in-store currency can be used across the customer stages. However, we place them here because their main benefit is in driving repeat purchases.
Above, Kohl's makes excellent use of their in-store currency, "Kohl's Cash". They trigger the above message when a customer fails to use their in-store currency, placing a clear expiration date and a clear reason for them to come back to the store.
Customer loyalty stage examples
Customer loyalty programs have become a staple strategy in moving customers to the final lifecycle stage.
We shown before how returning and loyal customers are much, much more profitable than new ones. In our last study on the subject, we found returning customers
13. Create seasonal or limited time products (ft. McDonald's)
Seasonal products give loyal customers something to look forward to and a clear reason to come back as often as possible during the limited time run.
McDonald's has a number of such products. With each, they run marketing campaigns to let their wide customer base know that the product is back.
Below is one example of their Egg Nog Shake, a favorite released during the holiday season. In this particular ad, they reward channel adoption (Twitter) with a free shake.
One of their best known seasonal items is the Shamrock Shake, made available around St. Patrick's Day. Here is an example ad they run during the promtion.
When a customer clicks on the ad, they are brought to the product page, which makes sure to highlight the limited nature of the product with copy like "before they're gone" and "available for a limited time only".
14. Use unique experiences that require loyalty membership to enter (ft. Starbucks)
Another way to engage loyalty members is through campaigns.
Brands can create exclusive games, rewards, and even exclusive products which are only available if you are a member in their loyalty program or have reached a certain tier.
Starbucks makes regular use of these lifecycle management technique. Below is an annual experience they run for their "Starbucks Rewards Members", called Starbucks for Life.
Starbucks uses experiences like these to move customers into their loyalty program. Above is an email sent out to subscribers. Non-members are invited to join the loyalty program for their chance to win numerous prizes, the grand prize being Starbucks for Life.
This guide covered numerous examples of customer lifecycle management.
The next step is to begin implementing these tactics in your own business. Namely, connect your data in one place, identify important customer segments, and use personalization technology to trigger messages as customers into into and out of your customer stages.
Barilliance helps hundreds of eCommerce stores trigger personalized messages across the customer lifecycle. To see if Barilliance is a good personalization partner for you, request a demo here.