Here is a quick and simple recap of the definition of the customer value cycle: In short, a customer value cycle is a process your customers go through when they are building a relationship with your company or brand.
You could see it as the various stages that customers must go through before spending their money with you, to the point that they do, and then come back to spend even more money. This cycle can begin at any point or with any interaction with your brand, eg. this could begin with a potential client visiting your website, signing up to your email list, receiving your content and finally spending money with you, but it doesn’t stop there.
You want these customers to turn into not just repeat customers but also advocates for your products, services and ultimately your brand.
Studies have shown that, on average, between 25% and 40% of the total revenue in many organisations comes from repeat business, and that the probability of selling to an existing customer is between 60% and 70%, compared to the probability of selling to a new prospect which is only between 5% and 20%.
Customer value cycle stages
Managing and maintaining the customer value cycle is crucial for businesses to remain competitive in the digital arena. This value cycle is broken up into five specific stages, namely:
- Reach
- Acquisition
- Development or nurturing
- Retention and
- Advocacy
Here are some tips to move your customers (profitably) through each stage of the value cycle:
Reach:
Your marketing content needs to be in places where consumers will find it, and it needs to be put there consistently. This is reach and it is generally the first step in the value cycle because it develops awareness from the outset.
Make sure you are seen, strategically, where your clients are actually looking.
Be cautious of taking a “spray and pray” approach, rather carefully consider where your target audience can be reached and engage with them there.
Acquisition:
Reaching potential customers doesn’t mean much if you can’t offer them relevant content. Understanding your company’s brand, the products or services you offer, and who is likely to purchase them will help bolster acquisition.
Reaching customers directly with personalised, relevant communication improves the likelihood of them not opting out of your communications. Have a look at our recent blog over here, detailing how you can use personalisation for more effective email marketing campaigns
Development or nurturing:
As soon as that first purchase is made, your business needs to keep in contact with the customer. This is where you have the chance as a business to develop a relationship with that customer and ensure that they’re fully satisfied with that first purchase, and come back for more.
You can further use the information on what they purchased to begin segmenting your customer base and serving them content relevant to what they are buying or what they are interested in.
Asking for feedback also helps develop customer relationships as customers appreciate the fact that their opinion is valued.
Retention:
If you’re able to continually serve personalised, relevant and appealing content to your customers, the chance that they will return and spend more money with your business is significantly higher.
Remember, retention starts with satisfying a customer’s needs, caring about their future needs and building a sound relationship with them.
If you can use a customer’s feedback to improve your offering, you make them feel as if they were a part of that process. This shows your appreciation and commitment to addressing their needs, as opposed to simply being sold to.
Advocacy:
The final stage of the customer value cycle is building brand advocates for your business. If customers are truly satisfied, they likely won’t have any issue in referring your product, service or brand to their network.
This is a marketer’s utopia, you want to reach the point where your customers are spreading the word (positively) about your brand, product and service on your behalf.
Spreading awareness amongst social circles is easy to do once a customer is loyal to a brand. If these customers continue to spread the word about how good you are, or how great the interaction with you was, their extended network is a lot more likely to convert to future customers of your business.
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The benefits of having a sound customer value cycle in place, and moving your customers through this process cannot be overstated. Not only does it help generate real ROI on customer acquisition, but by having a solid customer value cycle you can also create more effective messaging, targeting and nurturing for your customers and prospects too.
Focus your time on giving special attention to your most valuable customers and never forget Pareto’s handy principle: 20% of your customers are bound to generate 80% of your revenue.
Email is a great way to do this! Use your customer value cycle to identify your most valuable customers and communicate with them through automated emails, targeted newsletter content and so much more. Email can be used in every stage of the customer value cycle to assist with moving customers profitably through the cycle.
Get in touch at support@touchbasepro.com and let our team of email unicorns guide your business’s customer value cycle through effective email and SMS marketing.