Ultimate Guide to Customer Lifecycle Management (CLM)

Customer lifecycle management (CLM) is the process of tracking the steps a customer takes on their entire journey to making a purchase. Prioritizing CLM will provide help businesses offer better support and retain customers.

As technology and best practices evolve rapidly, it can be challenging for businesses to stay on top of their customer relationships.

Existing customers are huge assets for every business. To be successful, you need to take care of them, understand their needs and meet them so that they remain loyal to your company.

“Customer-centric brands report 60% higher profits than those that fail to focus on CX.”

Businesses can harness data to determine best practices for each phase of the customer lifecycle that will optimize lifetime customer value with the right tools and knowledge.

Let us explore the different stages of Customer Lifecycle Management (CLM) its benefits, strategies and examine how using CLM can help business owners maximize customer retention rates to improve overall customer satisfaction.

Table of Content

1 What is Customer Lifecycle Management: Definition
2 What are Differences Between CLM vs CRM ?
3 Benefits of Customer Lifecycle Management (CLM)
4 How to Manage the Customer Lifecycle (Best Practices & Tips)
5 Customer Lifecycle Management Stages
6 Top Customer Lifecycle Management Tools
7 Bring Your CX to the Next Level with Effective CLM Processes
8 FAQs about Customer Lifecycle Management

What is Customer Lifecycle Management: Definition

Customer life cycle management (CLM) is defined as a business strategy focused on developing, optimizing as well as maintaining long-term relationships by understanding the customer journey and their current needs.

CLM processes use automation to track every interaction with a customer so that businesses can better identify and respond to changing market trends as well as customer demands with tailored solutions.

The main goal of CLM is to create an environment where happy customers become repeat buyers who recommend your services or products to others.

In CLM strategies, businesses should strive for continuous improvement so that they can create meaningful engagements with their customers by effectively anticipating their needs or responding immediately to any issues they have.

Key objectives:

Creating seamless customer experiences across all touchpoints to drive engagement and satisfaction throughout the relationship journey.
Maximizing customer lifetime value through targeted interventions and personalized offerings at each lifecycle stage.
Reducing customer churn by identifying and addressing potential issues before they lead to relationship termination.
Building a loyal customer base that actively promotes the brand and generates organic growth through referrals and positive word-of-mouth.

What are Differences Between CLM vs CRM ?

Are you confused between CLM (Customer Life-Cycle Management) and CRM (Customer Relationship Management)? They seem to be very similar however, the differences are subtle but important!

Let us discuss on to get a better understanding of these two systems and their related benefits.

CRM focuses on the customer journey, while CLM looks at their life-cycle as a whole.
CRM is mainly concerned with driving sales, whereas CLM Is an overall strategy for managing customer relationships throughout their life cycle.
CRM collects customer data to improve interactions and communication, whereas CLM utilizes this data to track customers over time to understand retention.
CRMs offer sales enablement solutions, while CLMs provide additional functionality such as product updates, promotions, loyalty programs and other value-added services.

Benefits of Customer Lifecycle Management (CLM)

CLM helps businesses to nurture customer relationships, boost customer base as well as conversion rates and ensure satisfaction throughout the entire customer journey.

Build Stronger Brand Perception: Tracking engagement with both current customers and prospects helps to understand them better how to keep them engaged with your brand. A deeper understanding will help to tailor the approach resulting in effective marketing campaigns.
Support Customer Retention Efforts: Loyal customers are worth up to 10x as much as their first purchase. CLM also helps to identify loyal customers by tracking customer lifetime value (LTV) and helps gain insights into their preferences so that you respond accordingly with targeted campaigns.
Improve Targeting Capabilities: CLM also enables you to better target prospective customers by giving you a much clearer picture of who they are and what they want. It helps in developing effective campaigns making it more likely that they will be converted into paying customers from leads or subscribers than if you used generic messaging alone.
Deliver Superior Customer Service Experience: CLM provides an individualized approach that goes beyond just responding quickly or solving issues efficiently. Automated processes powered by CLM can be used proactively so customers receive timely assistance for their concerns and deliver a better customer service experience.

How to Manage the Customer Lifecycle (Best Practices & Tips)

Customer lifecycle analysis allows businesses to create consistent touchpoints. While it is quite difficult to get the lost customers should revisit their customer lifecycle strategy and ensure it aligns with the below customer lifecycle management best practices.

1. Understand Your Customer Profiles

Understanding the different customer profiles is an essential step in creating effective marketing strategies for managing a customer lifecycle model.

71% of companies that exceed revenue and lead goals have documented personas compared to 37% that meet goals. Businesses that have adopted customer persona strategies are seeing significant boosts in ROI and developing a better understanding of their customers.

Identify the different types of customers you have because each group has particular needs and expectations that require personalized approaches.
Make sure to look at basic demographic information as well as psychographic information such as interests, lifestyle, beliefs and attitudes.

Understanding the differences between your customer’s profiles, you can use the insights in tailoring marketing activities that will align with their needs better, delighting them and increasing lifetime value (LTV).

Best practices:

Identify a specific target audience, which will help you create content that’s relevant to your customers. The easiest way to define your target audience is to create buyer personas.
For creating the profiles make use of existing customer data, anecdotal observations, industry research etc.

2. Analyze Your Existing Customer Data

Analyzing your existing customer data is just as important as understanding your customer profile in order to effectively manage their journey through the lifecycle.

Analyzing key performance metrics such as purchase history over time, average order duration, response rates, etc. will help you determine how much value each type of customer contributes to your business. In addition to gauging performance, analyze how successful your current campaigns are in achieving their desired objectives by looking at ROI and other important measures so you can adjust or optimize them as necessary.

Utilizing technological tools such as segmentation and analytics based on specific criteria (location/channel/time period) are helpful in extracting insights from data points so you can optimize your efforts for each type of customer profile accordingly.

Best practices:

Capture the data that you need and get clear on what outcomes are needed.
Identify the right KPIs that are important to your business objectives.

3. Adopt Automated Chatbots without Losing Human Touch

The customer lifecycle has evolved significantly in the past few years and businesses are increasingly adopting automated technologies to make the customer experience more efficient.

According to Gartner, chatbots will become the primary customer service channel for roughly a quarter of organizations.

Deploying chatbots can help businesses in customer life cycle management and drive business revenue as well.

Automated chatbots can interact with customers in real time, efficiently and cost-effectively without sacrificing your personal touch.
Leveraging customer service bots, you can also collect valuable data on each customer’s preferences, which can be used for future offers and promotions.

Best practice: It is recommended to utilize a combination of both automated chatbot technology and human support can help you reach customers faster as well as provide them with timely resolutions to their problems.

4. Develop Long-Term Loyalty Strategies & Offers

Achieving long‐term customer loyalty requires developing an effective loyalty program tailored to the needs of each individual customer segment or segmented group. To retain customers and entice them to stay with their brand, companies have turned to the prospect of loyalty rewards.

54% of consumers say that they would consider doing more business with a company for loyalty rewards.

Consider creating special loyalty programs for frequent flyers such as airline miles, reward points for repeat customers, or discounts on specific products for returning customers.
Leveraging these tactics will help retain existing customers while also improving sales. Additionally, stay engaged with customers by offering events or periodic promotions that incentivize them to return in the future.

Note: Build strong relationships with your best-performing clients so they continue to prefer your business over time.

Best practices:

Make the loyalty reward programs easy to join and fast.
Consider text-to-join platforms
Avoid cards and apps

5. Make Every Interaction a Frictionless Experience

To effectively manage the customer lifecycle process, it is essential to make sure that each customer experience is as unobtrusive and effortless as possible.

It means ensuring all interactions are enjoyable, whether it’s through an automated customer support tool or in-person contact. Offering personalized experiences show your customers you care about them, making them more likely to stay engaged with your business.

Best practice: Deploy technologies such as AI chatbots, live chat to help provide a more efficient and engaging experience for customers.

6. Measure Customer Retention & Satisfaction Rates

As part of managing the customer lifecycle strategy, it is important to track the satisfaction rates for customers regularly. Knowing how satisfied current users are helps companies understand which areas need improvement when interacting with customers, so policies can be implemented or improved upon to ensure successful customer retention and future success.

Surveys and feedback forms can give an accurate impression of how customers feel about your product or service.

Brands should also keep track of key performance information like license renewals as well as time spent using your product/service to gauge loyalty levels among prospects and current customers alike.

Best practices:

Identify the key metrics and KPIs based on your business objectives to measure customer retention and satisfaction rates.
Measure the KPIs on a regular basis to understand the gaps of improvement.

Customer Lifecycle Management Stages

Customer Lifecycle Management (CLM) encompasses all the activities involved in influencing customer behavior throughout the customer lifecycle stages.

Stage 1: Awareness

The initial stage when a new customer finds out about your product or service. During this stage, the focus is on building a relationship with potential customers by educating them about your business and letting them know what makes your brand unique.

Stage 2: Consideration

During this stage, potential customers begin to consider whether they need your product or not, as well as research different options available in the market to make an informed decision. By providing helpful content and engaging them you can help influence their purchasing decisions.

Stage 3: Purchase

Companies need to keep their customers engaged in order to make sure they’re receiving value from their products/ services. Examples of engaging activities can include hosting online events such as webinars, creating content across digital channels inviting customers to take surveys and providing helpful information on support channels.

Stage 4: Retention

Once clients have been engaging with the company’s offerings for some time it may be necessary to provide updated versions to motivate clients to stay connected with the brand. Upselling is a great way for clients to get additional value from their existing experience while encouraging brand loyalty through loyalty programs.

Stage 5: Advocacy

The final stage involves maintaining ongoing relationships with loyal customers. Companies can do this by keeping their current offers up-to-date based on ideal customer feedback and giving loyal customers access to exclusive content or offers that demonstrate how important those customers are for growing profits.

Top Customer Lifecycle Management Tools

Every business, no matter the size, needs to have a customer lifecycle management strategy in place. By choosing the right customer lifecycle management tool for your business, you can improve customer engagement, streamline your sales process and ultimately increase your revenue.

Here are some of the top customer lifecycle management tools available:

Omni24

Omni24 is an omnichannel customer experience management platform that helps businesses engage with customers at every stage of their journey. It offers a range of features including live chat, email marketing, knowledge management to help businesses create personalized and effective customer experiences.

Key features:

Omnichannel support: Engage with customers across multiple channels including email, live chat, social media and SMS for a more seamless experience.
Automate customer communications: Simplify your customer communication process with Omni24’s automation features, including email campaigns, chatbots and social media integrations.
Intelligent routing : Connect your customers to the most appropriate agent based on the customer’s history, language and behavior, which not only improves response times but also ensures that customers receive personalized support.

Veemo

Veemo offers a conversational customer engagement suite for businesses to manage their customer interactions effortlessly. From attracting new leads to nurturing them through the entire lifecycle, Veemo helps businesses keep track of their customer journey in a single, easy-to-use platform.

Key features:

Omnichannel Communications: Veemo allows businesses to communicate with their customers on multiple channels such as email, SMS and social media, providing a seamless customer experience across channels for better engagement.
Customer journey analytics: With Veemo, businesses can gain insights into the customer journey and how customers interact with their brand. It helps them identify key touchpoints in the customer journey that require improvement, resulting in better customer experiences.
Lead scoring: Veemo simplifies the process of identifying high-quality leads by scoring them based on factors such as engagement level and demographic information so that businesses focus their efforts on high-converting leads.

Adobe Experience Platform

Adobe Experience Platform is a cloud-based platform that unifies data from multiple sources across marketing, advertising and commerce teams in real time. With AI-powered insights, this tool helps users predict customer behavior and create relevant personalization tactics for every part of the customer journey.

Key features:

Experience data model: Translate your data into a single standard data model or language, that makes customer data equally useful across your organization through standard schemas and schema-based workflows.
Real time customer profile: Combine all data such as behavioral, transactional, financial, and operational together into complete, centrally accessible profiles you can use to deliver personalization in real time.
Tags: Connect multiple technologies to streamline how they work together to more easily and more quickly deliver engaging customer experiences.

HubSpot

HubSpot is another popular tool modern businesses use to manage their customers’ lifecycles efficiently. The platform provides users with powerful automation capabilities so they can create tailored sequences that personalize each step in the buyer’s journey throughout their entire lifecycle – from the lead acquisition stage right through to loyalty campaigns.

Key features:

Integrations: HubSpot can seamlessly integrate with several third-party tools on the App Market. Some of its most popular integrations include Shopify, Stripe, Gmail, Outlook, Zoom, etc.
Customizable CRM: It offers a customized database for collecting as well as storing contacts, companies, deals and tasks. You need this to achieve better segmentation.
Dashboard and reporting: It allows you to build custom dashboards and reports. It empowers your team to access all the analytics and reporting they need in a single canvas.

Bring Your CX to the Next Level with Effective CLM Processes

The ultimate goal of any CLM process should be to provide better CX by producing customized experiences for individual customers throughout their lifecycle journey.

It’s important for businesses to continuously improve CLM processes on an ongoing basis in order to remain competitive and ensure that they’re providing their customers with high-quality services at all times. Making small modifications or adding new features can make a huge difference when it comes to delivering exceptional CX experiences on a consistent basis.

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Tushar Joshi

FAQs about Customer Lifecycle Management

Why is customer lifecycle management important?

Customer Lifecycle Management is important because it acts as a vital tool for the Customer Success team as it frames the customer’s journey. It helps in supporting customers as they move through the buying journey. By creating awareness, nurturing customers and creating an exceptional customer experience at each stage of the journey, you can turn your prospects into lifelong advocates for your brand.

What are the five stages of the customer life cycle?

The phases a customer passes through during the course of an ongoing relationship with a brand vary on a case-by-case basis, but here are five basic stages of a customer lifecycle: Awareness, Consideration, Purchase, Retention, and Advocacy. The different stages of the customer lifecycle represent the journey a customer takes to move from first learning about a brand to being the one telling others about it.

How can a CLM strategy help businesses optimize their customer acquisition, retention, and loyalty efforts?

An effective Customer Lifecycle Management (CLM) strategy helps manage customer relationships to provide a strong customer experience. By deploying advanced technology such as AI chatbots, businesses can address customer concerns instantly. By outlining an effective strategy and implementing the right CLM software, you can gain and retain customers for a longer time. Thus, helps businesses by creating real time customer engagement leading to happy customers.

What are the benefits of using customer lifecycle management software for businesses?

The key benefits of leveraging lifecycle management software for any business are that it provides data as well as insights to build a stronger sales pipeline, personalize customer experiences and run precision marketing campaigns. The insights prove really important in understanding the customer’s journey and providing them with exactly what they are looking for. Additionally, provides customer data for process improvements, and drives collaboration across the organization.