Are you looking for ways to measure the customer lifecycle? If so, you’re not alone. Many businesses struggle with how to best measure the impact of their marketing and sales efforts on customers. One way to approach this challenge is to focus on customer lifecycle metrics that matter. In other words, identify key milestones in the customer journey and track progress against those milestones. Doing so can help you better understand which marketing and sales activities are most effective at driving results.
Customer Lifecycle Metrics
Customer lifecycle metrics are a set of metrics that track a customer’s progress through the stages of their relationship with a company. These stages can include awareness, acquisition, conversion, retention, and loyalty.
These metrics can help a company track its progress in acquiring and retaining customers and can be used to identify areas of improvement.
What is the Customer Lifecycle Value (CLV)?
Applying the 80/20 rule to business, you can assume that 80% of sales come from 20% of customers. So, some customers are more important than others.
Having a clear understanding of your most valuable customers is essential for your company’s continued growth.
A customer’s lifecycle value estimates the total profit a company will make from its entire relationship with that individual.
Customer Lifetime Value (CLV) estimates how much revenue a business can expect from an individual customer. It is calculated by multiplying the average profit per transaction by the total number of transactions.
Customer lifetime value (CLV) is a core marketing concept that measures the net profit attributed to the entire future relationship with a customer. By calculating customer LTV, businesses can better understand how to allocate their marketing budgets and which customers to target.
To estimate your customers’ average lifespan, multiply the profits earned per customer times the average number of years they will remain a customer. Then you can subtract this from the total acquisition costs.
And from that, you have your customer lifecycle value.
Businesses can use customer lifetime value (CLV) to help them change their perspective on acquiring customers.
Optimizing your spending on marketing can help you maximize value, rather than just focusing on cutting your marketing budget. This, in turn, will help you attract more customers while staying profitable.
Stages of the Customer Lifecycle
Businesses should not only focus on conversion rates but also on metrics like customer lifetime value.
Because your new customers may only purchase from you once, they might not be worth much to your business.
Think about the steps that customers take before they purchase from your business.
The customer journey begins with opting into a company’s email newsletter. Then, they will eventually decide to buy a product or service.
Over time, your new customers will hopefully turn into repeat buyers and advocates for your business. This is known as the customer lifecycle — the process customers take when developing their relationship with your business.
25% to 40% of the total revenues of the most established companies come from repeat customers.
Did you know that repeat customers make 3-7 times more purchases than first-timers?
The customer journey begins with the first interaction you have with a potential client. Ideally, you want this to be a repeatable process that continues indefinitely.
Customer management is important for companies to stay relevant in the current market.
Understanding your customers’ journey will help you maximize your revenue and profits.
Attraction Metrics for B2B Marketing
Now let’s review some important metrics you can track during the Attraction Phase. Remember that you probably won’t be able to monitor all of them.
Choose one primary metric to focus on and a couple of secondary metrics to track. This will help you avoid feeling overwhelmed by too much information.
When it comes to attracting attention and creating awareness, the key is not just to report and analyze trends, but to ensure that your analysis is actionable. What metrics do you track to measure the success of your awareness campaigns?
- Unique visitors: Keep track of how many visitors are coming to your site each month. Note any sudden increases in the amount of web traffic coming from a specific location.
- Bounce rate: Bounce rate refers to the percentage of visitors that leave your site after viewing only one page. However, a high bounce could simply mean that they found what they were looking for and decided to leave.
- Social media followers: For this social media engagement score, tally up the total number of fans you have across your social media accounts. Stick with the same accounts as you monitor them over time. Also, see how often these fans are engaging with your content.
- Social shares: Know what the share count is for each social media network you monitor.
- Content: Take a look at how people are engaging with your landing pages, blogs, whitepapers, and webinars. Keep track of how many conversions each piece of content generates.
- Media visibility: Get a sense of how many press releases are created by your public relations team, and how many are picked up and shared by bloggers and news outlets.
- Events, webinars, and meetings: How many in-person and online events are you attending? Also, track the number of new sales opportunities you receive from these events.
- Google ranking: This is how you know if your content and SEO efforts are working. Pick a phrase that is relevant to your business, type it into Google, and see how you rank. If your content is better and more successful than your competitor’s, your position should improve.
- Search volume: Using trends on Google, you can track how popular your brand name is among people who are searching directly on Google search. This can help you gauge your general level of awareness. Keep in mind that the values shown for Google searches are constantly changing, so you’ll need to update this regularly.
The success of any awareness campaign can be measured by several metrics. To get a complete picture, you’ll want to track everything from web traffic and social media engagement to sales leads and conversions. By understanding which activities are driving the most attention and awareness, you can fine-tune your campaigns for even better results.
Customer Lifetime Value (CLV)
Remember that our predictive dialer models are designed to simplify and streamline the dialing process, but they’re not perfect. In a multichannel environment, the interactions and purchasing patterns of customers can be much more complex than what our algorithms can account for.
The customer journey is constantly changing, and your marketing strategy needs to keep up. Funnel models are outdated and can’t keep up with the changes.
People have more choice and power than ever before, thanks to social media.
Now they are in the sphere of influence of your business, but they won’t be for long. Many different representations have been made of the customer lifecycle, but the first was made by Stern and Cutler.
It’d be impossible to monitor every stage of the buying process.
You don’t know all the offline and online channels and interactions that a prospect used to learn about your company, let alone buy your product.
He may have been contacted by your in-house team, then visited or called by a rep from a partner company, while telling your inside sales reps that he wasn’t interested in working with you.
Disconnected from processes and systems?
If only you had a more holistic approach to your customer interactions… With new methods of interaction, the disconnection only grows.
Are you familiar with your customers?
Does the customer come back? What about your existing customers? Do you know them well enough? There may be a customer with extremely high buying potential sitting in your small accounts, only purchasing from you when your competitor is out of stock. What is the churn rate like? Does the customer come back?
The Customer Lifetime Value (CLV) is a prediction of the total value (mostly expressed in net profit) generated by a customer in the future across the entire customer life cycle
The Customer Life Cycle in a Connected Reality
Understanding your customers and their journey with you (and your employees) is extremely important.
The customer journey has changed a lot, but there are still the same goals: acquire, convert, retain, and advocate. There are more opportunities for both customers and marketing.
At the same time, measuring customer LTV is more challenging.
Having a complete view of your customers and matching their stages in the customer journey with the different direct, indirect, and brand-related cues, needs, and emissaries of intent, is crucial to success.
It’s more than just an individual campaign, marketing channels, and tactics.
We believe it’s important to look at your customers as whole people, not just as numbers. That’s why tools like automation software and customer relationship management (CRM) tools have become so popular. They help you create a view of your customer that takes into account their complete history, which helps you deliver better customer service and retain more customers.
However, we see that in general there is still a lot of focus on using such tools in a disconnected and often limited and campaign-centric way. This limits the potential these tools have for truly connecting with customers and meeting their needs.
Content marketing can hardly be called a marketing discipline as such as content plays a role in all stages, from reach to advocacy and beyond. When we look at the customer life cycle, it’s clear that several threads are running across each stage of the funnel. For example, content marketing meets customer intent and needs at every stage, from reach to advocacy.
Since content marketing is so much more than just creating and distributing content for promotional purposes, it’s hardly a “marketing” activity.
Even traditional and digital marketing methods like social media, email, and direct mailing require constant attention.
Indeed, the list goes on.
When we look at individual touchpoints, we can start to see how they connect to business goals, the sales cycle, customer experience, channels, and content. This gives us a more integrated view that allows us to see the customer as the key part of the equation.
Conclusion
There are several important customer lifecycle metrics to consider when trying to measure the impact of marketing and sales efforts. By focusing on key milestones in the customer journey and tracking progress against those milestones, businesses can get a better understanding of which activities are most effective at driving results.
