Ultimate Guide to Lifecycle Marketing [2023]

Acquiring new customers costs 5 to 25 times more than retaining one. This means an organization’s marketing efforts must go beyond the acquisition phase–and extend to the entire lifecycle. 

Lifecycle marketing not only strengthens relationships with existing customers but strategically targets them at every stage of the buying journey, increasing satisfaction and optimizing profitability. 

This strategy allows for a long-term connection with a customer, from their first engagement with a brand to post-purchase interactions. It emphasizes customer retention and encourages repeat purchases. 

By understanding customers' needs at different stages, businesses can deliver personalized communication and experiences, fostering strong loyalty. And with recent AI breakthroughs pushing past traditional bottlenecks in lifecycle marketing, successful lifecycle marketing is more achievable than ever before. 

In this guide, we’ll explore the ins and outs of lifecycle marketing, how AI is impacting its capabilities, and lifecycle marketing best practices you can implement in your business. 

What is lifecycle marketing?

Lifecycle marketing is an approach to marketing focusing on nurturing customer relationships throughout their entire journey with your brand. Unlike traditional marketing, which often emphasizes acquiring new customers, lifecycle marketing aims to engage and retain existing customers while driving revenue growth.

Picture it as a journey where customers interact with your brand at various stages, from initial awareness to becoming loyal advocates. Each stage demands a tailored approach and a deep understanding of your customers’ evolving needs. 

This results in profit: according to data collected by Gartner, approximately 80% of a company’s future profits stem from just 20% of its existing customers. Lifecycle marketing is the compass that guides your efforts to engage and nurture the valuable customer relationships you already have, ensuring that your customers not only stay with you but become your greatest champions.

Lifecycle marketing vs growth marketing vs demand generation vs CRM

Before we get into the ins and outs, let’s clarify what makes lifecycle marketing distinct from other related marketing concepts.

• Growth marketing: Growth marketing has a singular focus: acquiring new customers and expanding market share. Imagine startups offering a limited-time discount to attract first-time users. Unlike lifecycle marketing, growth marketing is about getting people in the door and increasing first-time purchases.

• Demand generation: Demand generation casts a wider net, aiming to create interest and demand for your products or services. This often involves lead generation through campaigns and content. For instance, a B2B software company might create in-depth e-books and webinars to educate potential customers about industry challenges.

• Customer Relationship Management (CRM): CRM is all about managing the interactions and data related to your customers. Think of this as the hub where you track customer inquiries, analyze purchasing patterns, and offer personalized support. If a retailer uses CRM effectively, it can support lifecycle marketing.

Lifecycle marketing examples

Let’s put the concept of lifecycle marketing into action with a real-world example that showcases how a company can navigate the customer journey, turning a new customer into a loyal brand advocate. 

Take, for example, Gourmet Spreads, an online specialty food store with exceptional customer engagement.

Stage 1: Awareness

A food enthusiast stumbles upon a captivating Instagram ad from Gourmet Spreads. The ad showcases a mouthwatering assortment of olive oils, honey, and spreads. Intrigued, the customer clicks the ad.

Stage 2: Engagement & Evaluation

Upon landing on Gourmet Spreads’ website, the customer is welcomed by a visually appealing interface that highlights the store’s range of products. While browsing, a pop-up offers a 15% discount for first-time customers in exchange for subscribing to the newsletter. The customer inputs her email.

In the following weeks, the customer receives personalized emails from Gourmet Spreads featuring curated recipe collections, pairing suggestions based on her browsing history, and exclusive promotions. These tailored communications keep the customer engaged and further deepen her evaluation of the brand’s offerings.

Stage 3: Conversion to Customer

One evening, the customer receives an email about a limited-time offer on a premium product bundle, a gourmet box. The customer clicks the link and is brought to the website, where she experiences a seamless checkout process, offering multiple payment options and the convenience of saving shipping details. 

The customer makes her first purchase, and Gourmet Spreads immediately sends a confirmation email that includes shipping details.

Stage 4: Retaining & Reactivating Customers

Now that the customer has been converted, Gourmet Spreads needs to retain her loyalty to the brand with a personalized engagement strategy. Gourmet Spreads, which has leveraged machine learning, sends periodic personalized emails with recommendations for complementary products, and loyalty rewards for repeat purchases. 

They even offer her a discount on a subscription to the gourmet box. These strategies keep the customer coming back.

Stage 5: Loyalty & Evangelism

As time goes on, the customer becomes not just loyal to the brand, but an enthusiastic advocate. She shares her experience on social media, posting photos of the product on Instagram and tagging the brand. 

Gourmet Spreads acknowledges and appreciates this loyalty by featuring her posts on their Instagram story and other social media channels.

Thus, Gourmet Spreads has guided the new customer from initial awareness to becoming a passionate brand evangelist, who will bring in new customers. 

Lifecycle marketing stages

Let’s delve into the essence of each stage of the lifecycle marketing journey outlined in the example above:

1. Awareness

The awareness stage is the starting point of all lifecycle marketing processes. This stage is all about building brand awareness and capturing the attention of potential customers. 

Effective marketers will build awareness across multiple channels, meeting customers on whatever channel they most frequent with messages that resonate with them.

2. Engagement & evaluation

Once you’ve piqued their interest, it’s time to engage and provide value. Share relevant content, guide them through your website, and offer resources to help them evaluate your products or services. 

To do this, make sure that your engagement strategies are highly personalized. Epsilon research found that 80% of customers are more likely to spend when they get a customized experience. Get ready to invest in machine learning, which can be leveraged to provide a true one-to-one marketing experience with personalized recommendations through the right channels at the right time.

3. Conversion to customer 

This is the stage when the prospect decides to become a customer. Businesses should focus on making the conversion process as seamless as possible. 

Strategies to do this involve offering incentives like discounts, free shipping, or limited-time promotions. Offer multiple payment options at check-out that require the least possible friction to aid in the conversion process.

4. Retaining & reactivating customers

Keeping existing customers engaged is less costly than acquiring new ones. Plus, statistics show that returning customers spend almost 70% more than new buyers. 

Employ email marketing, loyalty programs, and personalized offers to maintain a strong connection. 

5. Loyalty & evangelism

Loyal customers are your brand’s biggest advocates. These customers not only make repeat purchases but also promote the brand. 

Use personalization to encourage them to refer friends, leave reviews, and participate in loyalty programs. Their positive word-of-mouth can be the most powerful marketing tool of all.

Lifecycle marketing benefits

Lifecycle marketing offers numerous benefits to businesses that implement it effectively. 

Optimized Customer Experience 

Lifecycle marketing means providing an exceptional customer experience at every stage. This is more important than ever, with 61% of customers worldwide indicating that their standards for customer service have increased since the pandemic, and would consider defecting to a competitor after just one negative customer experience. 

Lifecycle marketing allows you to sidestep this outcome and retain your customers by providing an optimized experience.

Higher Engagement & Conversions

When your marketing message resonates with customers at the right time, you’re more likely to see higher engagement rates and increased conversion rates. This means more sales and revenue for your business. In the era of machine learning, this is all about personalization. 

Ninety percent of customers are willing to spend more with companies that personalize the customer service offered. Personalization means that businesses deliver tailored content, offers, and recommendations to their audience. 

While this may seem like a time- and resource-intensive prospect, tools like OfferFit transform this level of personalization from a pipe dream to reality by leveraging automated experimentation to learn from daily recommendations and apply that learning to the next day -- thereby providing the best message to each individual customer.

Improved Revenue & CLTV

Lifecycle marketing is not just about short-term gains; it’s about building long-term customer relationships. As you retain and engage customers over time, you’ll see a significant increase in your Customer Lifetime Value (CLTV). 

By effectively guiding customers through the various stages of their journey and providing personalized experiences, brands will significantly boost retention rates, resulting in increased revenue.

Incorporating lifecycle marketing into your strategy not only aligns with the evolving expectations of today's customers but also offers tangible benefits in terms of profit.

Lifecycle marketing limitations

While the benefits of lifecycle marketing are substantial, savvy marketers might be thinking about any challenges. However, emerging software that leverages generative AI and automated experimentation has significantly mitigated these traditional limitations.

Time and Resource Intensive

Implementing a comprehensive lifecycle marketing strategy can be daunting in terms of resources. It requires significant time and effort, and marketers need the agility to adapt quickly and experiment with different approaches. 

Lifecycle marketers are turning to automated experimentation to overcome this limitation. Tools like OfferFit use advanced machine learning capabilities to allow marketers to test and optimize various strategies efficiently, minimizing resource constraints and maximizing results.

Marketers set the options for different messaging, creative, incentive, channel, and timing. Then, OfferFit uses prescriptive AI to automatically discover the best-performing combination for every customer. 

Once configured, OfferFit makes daily recommendations for each customer, seeking to maximize the success metric you chose. The AI learns from every customer interaction and applies these insights to the next day's recommendations.

With faster experimentation, actionable insights, and extreme flexibility, lifecycle marketers can finally make decisions tailored to every customer. 

Learn more about OfferFit

Data Management

Effective lifecycle marketing hinges on the availability and utilization of accurate customer data. Managing and harnessing this data effectively can be a complex endeavor. However, with the right CRM system, businesses can streamline their data management processes. By implementing a seamless data collection and organization system, you can ensure that your lifecycle marketing efforts are built on a solid foundation of accurate and actionable customer insights.

Personalization

Perhaps the most daunting task of an effective lifecycle marketing campaign is to tailor messages to resonate with your audience and deliver a truly personalized campaign at every step of the lifecycle. 

Outdated personalization strategies using segmentation no longer cut it. Grouping customers into segments is intrinsically impersonal because it reduces each customer into a one-dimensional archetype.

True 1:1 personalization requires crafting a highly personalized campaign that takes into account each individual customer’s behaviors, tendencies, and needs. 

This level of personalization is made possible by harnessing the power of AI. Tools like OfferFit allow marketers to navigate the complexities of personalization and content creation with confidence, ultimately unlocking the full potential of their lifecycle marketing efforts.

Learn more about OfferFit. 

Lifecycle marketing strategies & best practices

Ready to unleash the full potential of lifecycle marketing? Focus on these best practices:

1. Implement campaigns for each lifecycle marketing stage

One of the key principles of lifecycle marketing is recognizing that customers go through different stages in their journey and each stage requires a tailored campaign. 

Early-stage prospects need awareness-building content, while those closer to conversion may benefit from special offers or demonstrations. Implementing a campaign specific to each stage ensures that your messaging stays relevant and truly resonates with your audience.

2. Provide the right offer for every customer at every stage

Personalization is key to lifecycle marketing. An effective lifecycle marketing campaign will provide the right message, with the right cadence, at the right time, through the right channel, to each individual customer. 

Cutting-edge technology solutions like OfferFit are designed to leverage advanced AI capabilities to precisely identify the ideal offers for each customer based on their stage in the lifecycle. 

By understanding their engagement history, OfferFit empowers you to deliver personalized offers that maximize conversions and customer satisfaction.

3. Understand MQLs vs SQLs

Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs) are two important terms that frequently arise in lifecycle marketing. 

MQLs refer to prospects who have shown interest in your product or service but may not be quite ready to buy. SQLs, on the other hand, are prospects who have demonstrated a higher level of intent and are closer to making a purchase.

Understanding the distinction between MQLs and SQLs is a critical step in tailoring your marketing efforts to each potential customer. 

Use various marketing mediums to reach different audiences

Not all customers engage with brands in the same way, making it essential to diversify your marketing mediums to reach a broad audience. While some customers may proffer email communication, others might engage more with social media or personalized chatbots. Employ a mix of marketing channels to ensure that your messaging is accessible to different audiences.

Incorporating these strategies and best practices into your lifecycle marketing approach can help you craft a powerful and effective customer journey that nurtures leads, drives conversions, and fosters long-term loyalty.

Improve Your Lifecycle Marketing

Lifecycle marketing is without a doubt a potent strategy not only to acquire new customers but also to nurture, retain, and transform them into loyal advocates.

To fully capitalize on the potential of lifecycle marketing, embrace innovative tools and software that can revolutionize your approach. OfferFit allows you to break down the traditional barriers of lifecycle marketing and achieve success. Take the leap and experience the power of AI-driven lifecycle marketing. 

Your journey to unparalleled success begins now.

Get started with OfferFit.