Modern day entrepreneurship is greatly influenced by technology. Online market has become the infinite playground for business people and consumers. However, the e-commerce has brought forward new game rules.

The traditional, conversion-only based marketing techniques have to be broadened into a comprehensive customer lifecycle development in order for entrepreneurs to ensure longevity of their businesses.

Customer Lifecycle DevelopmentIn this article, we will define the Customer Lifecycle Development strategy and its constituents as well as guide you through stages of customer development upon which it depends on. We will proceed to a comprehensive analysis of key elements of the process and metrics which should be employed for optimal results. Read through sections 1) Defining Customer Lifecycle Marketing; 2) Levels of Customer Development; and 3) Elements of Customer Lifestyle Development.


Customer Lifecycle Marketing is a strategy used in e-commerce which follows customer’s quantitative and qualitative progression in relation to a brand, a product or a service. It is based on statistical records of customer’s journey during phases of the process and focused on optimizing performance of various channels and touch points of interaction. The goal is to acquire customers as well as ensure perpetual satisfactory conversion rates which depends on the ability of creating an on-flowing circle of retention and loyalty.

Diverse metrics are used as tools for acquiring important information on the customers and their lifecycle progress (and we will attend to them in a separate section), however, the Customer Lifetime Value (CLV) is essential for Customer Lifestyle Marketing and Development. It measures the possible profitability customers can generate through their lifecycle of interaction with a company. In other words, it measures the current financial state and predicts future cash-flows from a customer. Moreover, CLV can provide information on the amounts of impact which specific marketing efforts have in diverse stages of customer lifecycle.

In order to understand the Customer Lifecycle Marketing and Development, you have to understand how a customer evolves through a lifecycle with a company.


Marketing strategies need to be segmented according to the targeted customer’s position in reference to your company. By acknowledging which stage are your (potential) customers in, you can employ subtle optimization strategies which will lead to satisfaction on both ends. Here we enlist main customer development levels.

Prospective Customer

A prospective customer is any visitor to your channels who has not been registered officially in any way–giving personal information or purchasing something. These visitors can be interacting with your website or click on your advertisement any given number of times but until they have given some details on themselves they are regarded as prospects – opportunities for new customers.


Leads are prospective customers who performed some micro conversion in relation to your company – at least providing you with their e-mail address. This way they have provided you a platform of contact and nurture which can result in the purchase later on.

First Time Buyer/ Single Purchase Customer

Single purchase customers are visitors who made a purchase on one of your channels for the first time. They are regarded as potential repeat and loyal customers (also potential churn customers). This is the level of customer development where conversion marketing usually fades out. The goal – conversion, has been achieved, and that is it! However, studies show that reaching full potential of a company depends on lifecycle marketing.

Repeat Customer

Repeat customers are those customers who have made more than one purchase from your company but are not yet regarded as loyal to your brand.

Loyal Customer

Different companies have different methods and conditions in determining customer’s loyalty. A pretty simple scheme is regarding a customer who has been interacting with your channels for at least six months, has purchased something from you three or more times and has had his/her last purchase in the past x months – as a loyal one. Achieving this level with your customers will ensure continuous conversion as well as advocacy of your brand loyalty.

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The first thing you should attend to in a Customer Lifestyle Development strategy is to segment your consumers according to their stages of development. All of them have different needs marketing-wise. Once you have done so, you will have to employ specific marketing methods to achieve optimal progress in the set direction. These methods are comprised in the threekey elements of Customer Lifestyle Development:

  1. Acquisition
  2. Activation
  3. Retention

1. Acquisition

1.1 Acquisition Goals

The goal of acquisition is to attract the highest possible amount of targeted visitors to a website. Targeted visitors are those who might have an interest in your products or services. Moreover, during the acquisition process, you should determine the profitability target by comparing Customer Lifetime Value (CLV) to the Cost of Customer Acquisition (CoCA). That way, especially if you are new in the entrepreneurial waters, you can attribute some of the possible negative profitability to the process of acquisition in itself – obtaining customers is essential in the early phases of running a business. The acquisition occurs in several subcategories (for example awareness, discovery, intent), and all should be managed both separately and as parts of a bigger whole.

1.2 Acquisition Tactics


Inbound marketing is based on the distribution of quality content online through channels like blogs, social networks, ebooks, e-mails as well as public relations and Search Engine Optimization Strategies. Entrepreneurs use these often free strategies to attract, address and grow interest in their targeted customers in a subtle manner.

In case of social networks, it can broaden your circle of visitors as well as serve as a non-invasive advertising device. It is important to note that your social media acquisition process should be focused on interaction and communication and used as a platform for distribution of relevant insights in the domain of your business. It should not, however, serve as an advertising melting pot.

In case of ebooks, involve your prospects in activities – upload downloadable e-books or organize webinars so as to acquire information which you can use for contacting them and interacting with them. Ask them for feedback on activities and personalize their content.

For example, Barrack Obama’s marketing experts recognized the opportunities of inbound marketing, especially on the younger, online-oriented voters and created a Facebook account for his presidential campaigns in 2008 and 2012. This enabled fast and vast information sharing and networking on a daily basis.


Outbound acquisition tactics mainly comprise out of advertising online, on radio, the television, in the print, face-to-face and through telecommunications – mostly at a cost.

Important here is that you show the right message to the right person and at the right time and place. Personalization goes a long way! Use behavior-based personalized analytics software and extract valuable information on specific prospects and customers. This is narrowly correlated with targeting landing pages. If you use a software for location detection of a visitor, you should use the information and land the visitor to a page which contains facts and offers in reference to his/her location. Depending on the type of business you own, search for and utilize different information with the same purpose – maximization of customer experience.

An example of efficient outbound marketing would be to create a catchy commercial or a jingle for your business and air it on radio stations which are frequently listened to by your targeted customers.


Product acquisition strategies are focused on word-of-mouth marketing and achieved by going viral. Videos which reach enormous amounts of views must have an element of surprise, humor, cleverness and wit or produce a powerful emotional reaction from viewers.

The Old Spice’s commercial The Man Your Man Could Smell Like and New Zealand Airline’s An Unexpected Briefing skyrocketed in numbers of views and proved to be extremely positively accepted among (potential) customers.

Online Assets

By upgrading performance of your online assets – websites, mobile sites how-to videos or guides, simple, fun and easy-to-use applications, special offers and social networking you will be able to acquire much larger amounts of prospects.

Gilt, for example, increased their revenues immensely by combining photograph-oriented website, useful mobile applications and the ‘invite a friend, and both of you get 25$ of credit’ scheme.

1.3 Acquisition Metrics

  • Customer Lifetime ValueCLV is the predicted total net revenue a customer will generate over the entire course of a relationship with a business.
  • Cost of Customer Acquisition – CoCA is the estimated financial cost of acquiring a customer. It includes the cost of the product or service as well as all expenses over a given period including salaries, research and marketing in reference to the potential profit.
  • Profitability of Acquisition -The profitability of the acquisition is the relation between CoCA and the amount of revenue acquired from the customer. In Customer Lifecycle Marketing, it is also a relation between CoCa and CLV.
  • Traffic Quantity – It is important to measure traffic quantity and the duration of time spent on your channels because all of the visitors are prospects – potential future customers. By employing analytical software such as Google Analytics, you can acquire data on the session during which your visitors have been actively engaged. The information can be used in the realization of micro-conversions which can lead to macro conversions and upper levels of customer development.
  • Customer Segmentation – Customer segmentation is an extremely important tool for marketing, in general. It provides essential behavioral patterns of all sorts which will determine the marketing strategy which should be used for progression of customer’s lifecycle. Segmentation can be focused on the articles or services which are bought, their amount, price ranges or steps which lead to conversion. It is a tool for personalizing your approach to clients whereas behavioral analysis represents the active process of data interpretation.
  • Cohort Analysis – Cohort analysis examines behavior of your segmented groups over time. It is beneficial for total comprehension of customers’ lifecycle. In addition, it points out changes in demand and patterns as well as gives an overview of your company’s financial situation.

2. Activation

2.1 Activation Goals

The goal of an activation process in Customer Lifecycle Development is to influence progression of prospects and leads to customers. It focuses on converting visitors by achieving micro conversions (such as converting a prospect into a lead by obtaining some personal information). The nurturing approach enhances engagement and moves the visitor towards a purchase (a macro conversion).

Additionally, during the activation phase and micro conversions, you should acquire information on visitors so you could contact them after their purchase and design a personalized campaign for them.

2.2 Activation Tactics

Here is the list of tactics which should be used in the activation process.


E-mails are a great channel for leveling your visitors upwards on the customer development ladder. If visitors provide you with e-mail information, they have given you the opportunity to interact and communicate with them. Your marketing team should carefully construct a campaign according to different segments of customers -a lead customer requires different types of information and opportunities then a loyal customer. For example, a lead should be introduced with the wide scope of easily accessible, usable and reasonably-priced products and services which you can offer. On the other hand, a loyal customer should be approached with personalized information which is acquired through the duration of the relationship (perhaps renewals or upgrades of products and services the customer purchased).

Content Marketing

Content marketing is a wide specter of content based advertising. Basically, your job is to continuously provide relevant, useful and interactive information (in the form of a blog, a post on a website or a downloadable application) on topics which are interesting to your targeted customers. Additionally, bear in mind that your segmented customers have different interest areas, and you should attend to all of them. For example, introductory content on various products and services which you offer for potential or new customers as well as detailed usage guides for experienced customers.

First Purchase Discount/First Purchase Free Shipping

People love good deals. If you offer a discount or remove the shipping fee for the first purchase, a large percentage of ambiguous visitors will become first-time buyers. Be careful not to continuously offer deals because they lose their leverage in persuasion that way. You should, however, introduce them occasionally because it will make your visitors, and customers feel nurtured, and appreciated –acquisition is a process which occurs during the entire customer lifecycle in slightly differentiated forms.

Time Limited Offers

Time limited offers are also a ‘good deal’ technique and provide excellent results in new customer acquisition.

Highly Targeted Landing Pages Based on Acquisition Channels

Targeting landing pages is an extremely beneficial tool for acquisition and lifecycle marketing, in general. Different segments of customers should be approached with specific landing pages so as to provide an optimized experience for each of them. Additionally, you should adjust landing pages in reference to channels which lead to them as well as mediums which are used to approach them (mobile phones, tablets, desktops).

2.3 Activation Metrics

  • Conversion Rate – Conversion rate is the amount of revenue you have generated referenced by the number of visitors on your channels. If used with Customer Lifecycle Value it is a great tool for obtaining relevant data but does not show the totality of the value – it does not consider future converts of visitors to customers nor the potential profitability.
  • Customer Lifecycle Value – as described in acquisition metrics.
  • Customer segmentation/Behavioral Analysis – as described in acquisition metrics.
  • Cohort Analysis – as described in acquisition metrics.

3. Retention and Loyalty

3.1 Retention and Loyalty Goals

The Customer Lifecycle Value becomes even more important in the stages after the first purchase. The goal is to improve average Customer Lifecycle Value in its entirety, not at a specific point. This will be achieved by advancing your first-time buyers into repeat customers by using behavioral analytics and determining what was it that caused other single purchase customers to level up to repeat customers. Further on, convert repeat customers into loyal customers following the same principle.

Moreover, goals of ensuring retention and loyalty consequently demand minimization of churn (customers who become inactive). You have to employ marketing techniques which will keep your existing customers because it will cost you up to six times more to acquire a new customer than it will to preserve the ones you already activated.

3.2 Retention and Loyalty Tactics

Average Customer Lifecycle Value Improvement

Segment your customers and analyze behavioral data in order to design customized marketing campaigns which highly target them. The point is to focus on all segments according to their specific needs and possibilities of development. Offer quality and personalized approaches because a nurtured customer is a happy customer, and happy customers want to stay happy – retention and loyalty!

For example:The 1% of your top customers provides you with the same amount of revenue as your bottom 50% together. You can define your most profitable clients by calculating Customer Lifecycle Value. The so called Hero Customers should be given special treatment in the form of exclusive access to products, individually targeted offers, invitations for membership clubs with beneficial features, prioritizing their needs and employing a highly personalized communication with them.

Make sure to specifically target the Evangelists – individuals with a massive influence in relevant communities. They are the best ‘word of mouth’ you can wish for.

Economical customers are those who hunt for discounts. Send them targeted offers occasionally so they would not churn but do not condition them to expect the good deals all the time.

Some customers have a lot of dispensable income but are infrequent in purchase. Analyze their needs and behavior patterns and send them special offers.

3.3 Retention and Loyalty Metrics

  • Conversion Rate – Conversion rate is the proportion of customers who purchased a product or a service in relation with overall visitors (prospects or leads) to your channels.
  • Percentage of Churn (Monthly) – Churn rate represents the amount of your inactive customers – shows issues in marketing machine and post-sales support efficiency.
  • Frequency of Conversion – Frequency of conversion is the rate of conversions of (a) particular customer/s in a specified unit of time (for example, the average sales cycle).
  • Engagement (Micro Conversions) – Micro conversions are any advancement in the quality or quantity of interaction a prospect or a customer makes in relation to your business. For example, it is downloading some content which you offer on your website or providing you with some feedback in reference t a webinar you organized.
  • Customer Lifecycle Value – as described in acquisition metrics.
  • Cohort Analysis – as described in acquisition metrics.
  • Customer Segmentation – as described in acquisition metrics.

In order to boost your e-commerce, you have to understand your customers and engage them according to their needs and desires. Online marketing is bursting with options but does not tolerate intrusive campaigns. Most people simply ignore pop-ups, they can leave a website and sign out of a group on a social network if it does not suit them any longer. In order to achieve your revenue opportunities to the fullest, you have to turn to a more holistic approach to visitors and customers. By understanding what and how they progress in relation to your company you can focus your marketing endeavors and distribute finances appropriately. The analytics of the business world coined diverse metrics which will help you in the process.

All entrepreneurs have a spark of passion which they want to share with their customers. The e-commerce is an ideal platform for the complex and highly functional system Customer Lifecycle Marketing and Development based on mutual engagement and profitability.

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