14 Jul 3 Key Ingredients to Lifecycle Marketing
The results are out – on average loyal customers are worth up to 10 times as much as their first purchase (white house office of consumer affairs). The big question is how do you gain these high value customers and keep them engaged with your brand? The answer is lifecycle marketing – a key component of Retention Marketing. An effective lifecycle marketing strategy is the most precise way to send your customer the right message at the right time.
Lifecycle marketing uses data analysis to profile and predict where customers are at critical points in their consumer lifecycle such as their level of engagement, spending habits and lifetime value. Targeted and timely campaigns are then sent to drive repurchasing and encourage customer advocacy.
Retention Science’s CEO, Jerry Jao states: “Retention marketing centers around timely and relevant communication to generate repeat purchases. You have to know how to market to those customers in a way that’s relevant and with a value proposition that gets them back in the door.”
“Relevant emails drive 18 times more revenue than broadcast emails” – Jupiter Research
The most effective way of implementing lifecycle marketing campaigns is by breaking customers down into four different groups – Interested Prospects, Engaged Customers, Inactive Customers and Advocates. Interested Prospects are email recipients who have requested communication with your business; Engaged Customers are currently active with your brand through purchases and communications; Inactive Customers have stopped purchasing and opening your emails; Advocates are customers that continue purchasing and tell all their friends about your brand.
Relevant campaigns are then sent such as Welcome, Activation, Win-Back and Rewards, as they hit each stage in their lifecycle. Welcome campaigns are focused on educating new email subscribers about your brand; Activation series encourage the subscriber to purchase or become a paid member; Win-Back campaigns focus on getting churning customers to repurchase; Reward campaigns offer incentives and exclusive promotions and events to loyal customers.
This approach allows you to deliver relevant and targeted communications to your customers. As well as driving repurchasing you can prevent churn, build deeper relationships and nurture your customers through to the advocate stage.
Here are three key ingredients to include in a successful lifecycle marketing strategy.
1. Data Analysis
Data is the foundation of any lifecycle marketing campaign, as it’s used to identify where customers are in their lifecycle at any given moment. The more data available, the better. This can include transactional data – how much did they spend on their last purchase? Or behavioral data – when was the last time they visited your website? Here are a few examples of specific data points we use at Retention Science:
Purchase history, items added to cart & product page views: The combination of these three data points are the most influential for determining what currently interests your customer.
Prior discounts used: If you are up selling or wanting to win back churning customers, you’ll probably offer a discount at some point. The question is what should it be? Every customer will have a preference between a percentage or dollar amount off, free shipping or a free gift. Using the customer’s purchase history allows you to identify these preferences.
Frequency of website visits and length of time on the site: Most customers will develop behavioral patterns that stay relatively consistent in terms of when and how they interact with your brand. These two data points will help you identify a spike in engagement that should automatically qualify them for communications aimed to drive a purchase.
Now that you have used data science to predict where your customers are in their lifecycle it’s time to personalize your messages with relevant content – including incentives and product offers. A Welcome series is focused on educating your customers about your company in order to drive first time purchases. The Honest Company, an environmentally friendly baby supplies business, used Retention Science to personalize all their Welcome series campaigns with incentives, product recommendations and timing. This led to the re-engagement of trial customers and 170 percent more paid membership conversions for every 1,000 campaigns sent out.
Implementing an automated marketing platform that incorporates predictive analytics will save you time and money. When combined with lifecycle marketing, it will allow you to automatically qualify and place a customer in the appropriate series, and then automatically deliver targeted content that is relevant to them. If the platform you are using is sophisticated enough, the content can include dynamic product recommendations and offers specific to the customer.
Still interested in learning more about lifecycle marketing? With one foot forward, let’s get way more in-depth: