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Customers are not equal. Some are visiting for the first time, while others are frequent buyers. Customer lifecycle marketing uses this reality to create personal, relevant offers throughout the customer journey.
Using lifecycle stages, eCommerce stores can improve customer experience and increase profits.
This guide details advanced lifecycle marketing strategies and tactics - with examples from Southwest, Tula, Mercari, and more. To skip straight to the examples, click here.
Customer Lifecycle Marketing Definition: What is lifecycle marketing?
Customer lifecycle marketing is simply communicating to people according to which lifecycle stage they are in.
As customers engage with your brand, they go through "stages".
While each business model is different, the most common stages in lifecycle marketing are:
1. Customer Acquisition
2. Customer Retention
3. Customer Development/Loyalty
This process of going from acquisition to loyalty is called the customer journey.
Creating a Framework for Customer Lifecycle Marketing
We need a mental model for lifecycle marketing campaigns before we create one.
InfusionSoft, an early pioneer in customer lifecycles, created the first model. They divided the buying journey into three stages.
You can see their original framework below.
Today there are many options to reach prospects and nurture them into lifelong customers.
In our opinion, the best approach is to react to a customer's actions (their behavior), in real time. When appropriate, you should communicate reasons why they should move onto the next stage. Implementing behavioral segmentation is simply the most effective way to improve customer experiences and increase conversions.
To do this requires three core movements.
1. Triggers: Triggers define when a marketing message should be presented to a customer.
2 .Messages: Messages define the actual offer as well as how it is being presented (in an image, text, video, or other type of customer experience).
3. Channels: Channels detail where the customer experience is taking place.
Let’s break down these three components of a lifecycle marketing campaign further.
1. Lifecycle Marketing Triggers:
A trigger is a predefined condition that a customer satisfies. Typically, it is an action a customer takes such as opting into a newsletter or making a purchase.
However, a trigger can also be an absence of an action. For example, if a certain number of days pass without you hearing from a customer, it might be a trigger to follow-up.
Triggers represent a core difference between lifecycle and traditional marketing.
Traditional marketing is initiated by a brand. Lifecycle marketing is initiated by the customer. Triggers success in email marketing have led it to be adopted in other channels and are a key component in customer lifecycle marketing strategies.
Below are a number of common lifecycle marketing triggers. However, keep in mind that this is an incomplete list. Any customer action (or non-action) can be used as a trigger.
2. Lifecycle Marketing Messages
The second component of lifecycle marketing is messages. Messages are what you actually send to your customer.
You should make your messages both relevant and contextual.
By relevant, I mean the customer should care about the message. By contextual, I mean the message should relate to the trigger that caused the message in the first place.
A great example is an email welcome series, triggered after a customer joins a loyalty program.
Like triggers, messages take many forms.
Common types of messages include specific content (blog posts, white papers, testimonials), product guides, various offers, and solicitations for feedback.
Unfortunately, many brands limit the types of messages they send. Often, the biggest difference between a basic and advanced lifecycle marketing strategy includes a significant difference in the types of messages sent.
3. Lifecycle Marketing Channels
Channels are the final component of lifecycle marketing. The channel defines where you will engage the customer.
In 2020, email remains the most prominent channel used by eCommerce stores. However, there are a multitude of channels you should consider.
Customer lifecycle marketing meets the customer where they are. It is a true omni-channel strategy that selects the right channel based on the last customer interaction.
Below is a short list of channels.
Now that we've covered the basic components, I want to showcase examples of lifecycle marketing campaigns from the top eCommerce stores in the world.
Customer Lifecycle Marketing Examples, Strategies & Tactics
1. Integrating personalized recommendations into welcome series ft. Mercari (acquisition lifecycle stage)
Trigger: Prospect signs up to newsletter or creates an account.
Message: Introduction to brand, articulation of USP, and personalized recommendations.
Channel: Email, Facebook Messenger, in-App Push Notifications.
Welcome sequences are among the most common lifecycle marketing strategies used today.
Unfortunately, many stores limit themselves to simple price incentives to move customers from the acquisition to retention stage. Take MattressFirm for example.
A Basic Welcome Email for Customer Acquisition Stage
There are times when financial incentives are the right play. And, to be fair, the Mattress Firm does implement a number of best practices with their offer including using a one time code, manufacturing urgency with an upcoming expiration date and implementing a spending threshold to hit before the gift kicks in.
However, you can dramatically improve the quality of your welcome messages through personalization software. Our favorite way of doing this is by incorporating recommendations.
An Advanced Welcome Message with Personalized Recommendations
Before prospects opt-in, they are engaging with your site. Connecting this browse behavior to the anonymous session gives you a great opportunity for contextual followup.
The image above shows Mercari doing this beautifully. They open with an enticing subject line: "10 items from your recent search." and dynamically insert recommendations connected to the brand that was searched.
Dynamically inserting these recommendations in your welcome series, either influencing the type of content your present or actual product recommendations, will immediately improve your email engagement.
2. Use personalized recommendations in abandoned cart follow-up emails (acquisition lifecycle stage)
Trigger: Prospect abandons purchase, and does not respond to initial abandoned cart message
Message: Offers related to the initial product placed in cart
Cart abandonment emails work. In our last study, we found that our customers average an 18.64% conversion rate on these campaigns.
Again, there are both basic and advanced strategies you can use here.
In our tests, we've found cart abandonment emails with personalized product recommendations significantly outperform those with standard ones.
In the study, personalizing these recommendations on a 1:1 level increased clicks by 289% and purchases by 189%!
3. Implement browse abandonment campaigns (acquisition lifecycle stage)
Trigger: Prospect abandons session without placing any items in their cart.
Message: Offers related to customer's session activity, including content read, products viewed, and categories visited.
Channel: Email, Push notifications.
A study conducted by YesLifecycleMarketing found that only 5.3% of eCommerce stores leveraged browse abandonment.
Most companies sabotage themselves by only responding to customers after they abandon a cart.
The truth is...
Many prospects leave your site before they get that far. We've found the best way to position your brand for this strategy is by providing value through customer service.
"Most companies sabotage themselves by only responding to customers after they abandon a cart."
Some of the most effective browse abandonment campaigns we perform for customers are "Email My Cart" and "Visit Summary" campaigns.
Barilliance customers achieve up to 22.73% conversion rates on email my cart campaigns, and 14.13% conversion rates on Visit Summary triggered emails.
Free Resource : Discover how Barilliance recognizes anonymous visitors, enabling browse abandonment campaigns through Booster Pixels. Click here to view.
4. Leverage replenishment reminders ft. Tula (retention lifecycle stage)
Trigger: Date and time since last purchase
Message: Questions and reminders about replenishing stock, with clear CTA to purchase.
Channel: Email, FB Messenger
According to Ometria, replenishment emails garner a ridiculous 60% open rate.
Understanding the natural product lifecycles gives you an opportunity to reach out and inspire action. Even industries as slow moving as housing can reach out for maintenance on HVACs, furnaces, roofs, and more.
You can maximize your effectiveness by reaching out early, and following up with incentives. I like bundling complimentary products to discounts, but both work.
Here, Tulia is trying to convert a one-time sale to a subscription.
They call out three major benefits for signing up:
5. Integrate personalized upsells and cross-sells ft. Southwest (retention lifecycle stage)
Trigger: Date and time since last purchase, Product Purchased
Message: Complimentary offers personalized to last purchase
Channel: Email, FB Messenger, Push Notifications, Social Retargeting
We've discussed before the power of returning customers. Despite converting 74% more often, and spending 17% more per transaction, most eCommerce stores do not have a personalized follow-up campaign.
The example above is from Southwest.
They start with a highly personalized subject line, injecting the location of the trip and confirmation number. They pair it with a great prompting question: "Have you booked your hotel?".
The rest of the content is personalized to the trip, with strong call to actions that underline the added benefits of extra points.
6. Move customers into loyalty programs ft. Starbucks (customer development lifecycle stage)
Trigger: Date and time since last purchase, Product Purchased
Message: Status, Rewards, Gifts
Channel: Email, Direct Mail, Social Advertising
Loyalty programs should bring your existing customers closer to your brand. In their most recent study into customer Loyalty, McKinsey & Company found that loyalty programs have positive impact on purchase frequency, brand affinity, and basket size.
My favorite example is Starbucks. While most think of Starbucks as a brick and mortar player, the reality is they have built out an impressive omnichannel retailing strategy capable of reaching customers across channels to drive repeat purchases.
How do you get customers to join a loyalty program? Beyond making the perks worth it, you need to craft the right message.
In Starbuck's case, they capture each customer's email when they access the free internet they provide in store.
They use this permission to send a wide variety of offers. Here, they offer you accelerated gold status. They tie it to a specific day and additional purchase - but most importantly, they require you to join the reward program.
When they don't convert on the first message, they use a different offer.
Here, they simply highlight the benefits of joining the Rewards Program - in this case free coffee. Notice how everything - from the email subject line to the images reinforce the central benefit.
7. Create bundles to increase profitability of loyal customers ft. Disney (customer development lifecycle stage)
Disney is a master at cross-selling and bundling products.
When Disney launched their new streaming product, Disney+, they took advantage of their existing product line acquire customers. The result was a bundle that allowed customers to enjoy Hulu, Disney+, and ESPN+ in one single subscription.
"one thing that continues to impress us is the opportunity to have the bundle in the U.S. be even larger." - Bob Chapek, CEO Disney
Even better, bundling products allowed Disney to increase their prices while simultaneously providing more value to their average customer. The result was more profits without customer churn.
"these were our first price increase since we launched. I have to say that we're extremely pleased with how the market reacted to both. In the U.S., we've not observed any significantly higher churn rate" - Bob Chapek, CEO Disney
Leveraging customer data to create customer lifecycle marketing strategies
Customer data is the key to effective lifecycle marketing.
Successful eCommerce stores must leverage customer data platforms to create the most effective strategies. While we showcased concrete examples above, here we will take a more theoretical approach to designing lifecycle strategies.
Lifecycle strategies during customer acquisition
The acquisition stage really consists of two sub-steps. First is discovery where customers get to know your brand. Second is exploration, where customers go through your offerings.
During the discover portion, eCommerce stores need to proactively segment visitors. There are a variety of tactics available.
In order to properly execute these strategies, you must connect your customer data to your marketing.
While many technology partners claim to be able to help, they often do not address some of the most significant challenges in lifecycle marketing and personalization.
Before you select a technology partner, make sure you understand the 4 major challenges you will face connecting your data.
Then, see if Barilliance is the right solution for you. Request a demo here.