What Is the Customer Lifecycle
Customer lifecycle, or lifecycle stages, is an organization’s way of grouping their contacts. Take note that this is different from the buyer’s journey, where the customer goes through different phases from their perspective. Here, customer lifecycle is segmentation from the perspective of your organization.
Customer lifecycle is an organization’s way to describe the various stages a contact goes through when they are considering, buying, using, and remaining loyal to your organization.
The most important benefit of the customer lifecycle is it gives both marketing and sales a way to understand exactly where their leads and customers are at any given stage.
I’ll write a more thorough article about the main differences between the buyer’s journey and the customer lifecycle next time. But for now, I’ll focus on what the customer lifecycle is.
7 Customer Lifecycle Stages
A subscriber is someone who is slightly interested in hearing more from you and is not ready to buy now.
They may or may not be a good fit for whatever you are selling. The main reason for this is you don’t know anything about them.
Most of the time, these are people who subscribed to your blog and newsletter updates.
That is why selling to your subscribers often have disappointing results. Both parties don’t know anything about each other, but one party (you) already started selling to them.
It’s like proposing to someone to marry you on the first date. 🤦♂️
Customer lifecycle is segmentation from the perspective of your organization.
A lead is someone who is more engaged than a subscriber.
These people have self-qualified themselves by completing one of your macro goals. These come in the form of engaging your marketing offers like downloading PDFs or asking you some questions about what you offer via your contact us page.
I suggest reading those articles because they can give you a clearer picture of how people buy and how your organization can be part of that buying process.
For small businesses or those who are starting out, most of the time you can group subscribers and leads together. The more important distinction are what follows next.
3. Marketing Qualified Lead (MQL)
Marketing qualified leads or MQLs are people who performed selected actions on your website.
For example, they filled out your contact us form that asks them thoroughly so you know exactly what you need to know. If you’re a software provider, these people are the ones who downloaded your software and/or requested for a demo.
It’s important to remember two things here:
- MQLs are more engaged than regular leads. These are the people who performed selected actions on your site. Not everyone will convert to an MQL.
- Usually, this is the point where marketing passes of the lead for sales.
It is important to note that MQLs have been pre-qualified by marketing to meet certain criteria that would make them a good fit for your products/services.
4. Sales Qualified Lead (SQL)
A sales qualified lead or SQL is someone who has progressed further down the funnel.
In practice, these are people whom your sales team have contacted and have responded positively.
An opportunity is a contact who is ready to buy, able to buy, and willing to buy.
This is the only time when you (or sales) create an associated deal for the contact. It means they have fulfilled the 3 conditions listed above.
What this means is sales have re-qualified these people and have weeded out people who are just looking around. These people are, in fact, in the buying process. They are actively looking for a solution to their problem (or put it differently, trying to seize advantage of something).
In your CRM, when a contact becomes an opportunity, it creates a deal associated with the contact. That’s when you can clearly attach a ₱ or $ value to it.
This is the stage that everybody loves — a paying customer.
When a contact becomes a customer, several things happen. This should trigger a proper onboarding series. Along the implementation, you should create several milestones where you can ask for feedback, get some reviews, and ask for some referrals.
Evangelists are people who you know will never buy from you but are raving fans of your business. For example, these can be brand ambassadors or simply someone who likes what you do but can’t afford you. Other people also call this Promoters.
For example, I’ve been following HubSpot since 2012. I’d count myself as being one of their evangelists since they have given me so much value through their content. Up until 2015, I personally can’t afford their software, nor do the organizations I worked with at those times.
If you were to only categorize me in the normal sales cycle, I would have already fallen out. No lead nurturing campaign lasts for 3 years.
But, when I had the chance to handle the digital marketing of an organization with a relatively big budget, I jumped on this opportunity and subscribed to HubSpot’s marketing platform.
Not everyone can and should be your customer. By trying to sell to everyone, you will eventually experience customer churn and/or realize more problems for your organization.
For example, you sell enterprise software. A small business will eventually stop subscribing to your software because it’s expensive and that they aren’t using it that much. Another scenario is if you’re a startup and your target are small businesses. You certainly don’t want to target bigger organizations because, even if they have the budget, you”ll often be asked to do more than what you can offer. This can take in the form of more customizations, favors, and a whole lot more. Basically, more headache for you.
Pro Tip: if you are using a CRM, you’d notice that the lifecycle stages are tied to the Contacts (or People, depending on how your CRM calls them). They are not associated with deals. What this means is that you don’t only look at deals. Deals, like discussed above, are real business opportunities that have a ₱ or $ value to them. This framework allows you to focus only on customers that are a high fit for your business.
So, what are you going to do next?
Use the customer lifecycle to segment your contacts internally. Having a proper marketing and sales alignment on how each stage is defined will save you future headaches. Both marketing and sales will know their respective roles and won’t keep blaming each other for not reaching their goals.
How are you using the customer lifecycle in your organization?
Let me know in the comments below!