Five Steps in Creating Profitable Customer Relationships

By: Christian Fea
Recognizing a customer life cycle and aiming for these distinct steps in your customer retention strategy is an important building block to your company's relationship marketing scheme. A relationship marketing platform puts the customer at the central focal point of your business, and thinking in terms of a customer life cycle and how to move your customers through these distinct stages will help you select, target, and retain a strong customer base.

A customer life cycle may vary depending on your company and what types of products and services it sells. Your customers will have a different buying cycle depending on what you sell. For example, if your company sells coffee, the life cycle and re-order time will be different for your customers than it would be if you were selling contact lenses or shoes. If your business gets customers on a monthly renewable buying scheme, your customer life cycle will be slightly different from a company who has customers purchasing roughly quarterly or every six months.

Given these parameters, there are five stages in a customer life cycle that are readily accepted and agreed upon. These are the natural procedures that a customer goes through when considering a purchase, making a purchase, using a new product and staying loyal to a product and company. You may need to alter your customer lifecycle scheme, but these five steps are a good way to get started.

Step 1: Reach

The first step in a customer life cycle is to reach out to prospective clients. You need to think in terms of how to gain a new clients attention.

Step 2: Acquisition

Acquisition is the step where you show a potential customer what your company has to offer. Once you have the attention of a potential new client, you must engage them to keep their interest.

Step 3: Conversion

Conversion is the act of turning a prospect into a paying customer. It sounds a bit underhanded, as though you are trying to "convert" a client from a competing company to yours, but this is just a technical term. The goal here is to convert someone who is merely considering a purchase to actually making a purchase.

Step 4: Retention

Retention in the customer life cycle is exactly what it sounds like: you want to figure out how to retain and keep this new customer as a repeat client. You'll need to focus on things like personalized attention, offers and customer service to make an impression with your new client, and inspire them to keep purchasing from you.

Step 5: Loyalty

Loyalty is distinct from retention - at first glance they may seem like the same thing, but they are not. Retention is about turning a new customer into a repeat customer, creating a personal loyalty. But loyalty in the realm of a customer life cycle applies to word of mouth. If you can get your existing customers to recommend your products and services to other people, this is what really helps to create a loyal following.

Developing a customer life cycle and thinking in terms of this cycle every step of the way is an integral part to a successful relationship marketing plan and will help ensure the success of your online business.