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The Ecommerce Customer Lifecycle

Updated On:10-August-2016

In a world where acquiring new customers is increasingly costly, maximising the lifetime value of existing customers by encouraging them to shop with you again and again makes a lot of sense.

And it’s this idea - of developing a core base of active, loyal, revenue-generating customers - that lies at the heart of customer lifecycle marketing (CLM). As far as you’re concerned, the more of this type of customer you have, the better and everything you do in your lifecycle marketing efforts should be geared around nurturing customers into this status.

By splitting the customer journey into different stages, you can start formulating strategies to activate them and increase their loyalty and lifetime value.

Prospect:
Those who have given you their email address, but have not yet made a purchase. These might be people who have signed up to your newsletter, entered a competition, or who have created an account.

Active customers:
A customer who has recently purchased, and is making purchases at their expected frequency.

The active customer category can be split into two segments:

One-time purchasers - those who have recently made one purchase. Repeat purchasers - those who have made more than one purchase and are buying at their expected purchase frequency.

At risk customers:
A customer who has passed the time they might be expected to have made their next purchase. For instance, you may consider a customer to be 'active' for 10 weeks after they've made a purchase, and if they pass this point you may want to start being proactive about re-activating them.

Lapsed customers:
A customer who has gone far beyond the time they were expected to make a subsequent purchase.

Lifecycle marketing tactics

Once you are able to identify which of your customers and prospects fall into each of these categories, you can create specific strategies aimed at activating them. You can also apply further segmentation, such as:

Hero/VIP status: whether a customer can be considered one of your 'top' customers (usually calculated by lifetime spend, number of orders and recency).
Warm/cold status: whether a customer is interacting with your marketing messages (e.g. opening emails, browsing your site).
Welcome campaigns: aimed at introducing new subscribers to the brand, building a sense of loyalty early on, and encouraging them to make a first purchase.
Post-purchase campaigns: aimed at setting up a further purchase.
Reactivation campaigns: targeted at customers who have lapsed or are at risk of lapsing, tempting them back to buy from your store.
Replenishment campaigns: reminding customers to re-purchase consumable goods to keep them active.

You can also use lifecycle stages to segment other types of triggered campaigns you might be running. For instance, if you send cart abandonment emails, you may consider segmenting by lifecycle stage to incentivise a purchase. For active customers you may decide not to include an offer, but for 'at risk' or 'lapsed' customers, your email could include a discount or promotion to win them back.

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https://www.ometria.com/blog/ecommerce-customer-lifecycle

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