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Article: Get Better Business Results from the 4 Stages of Your Customer Lifecycle -- Growth by Karin A Ferenz
Published 11/29/2018

Each Lifecycle Stage Offers New Opportunities

Each stage in the customer lifecycle—acquisition, service, growth, retention—has its own unique customer needs, attitudes and behaviors. This creates the opportunity to identify and measure competitive performance requirements and metrics for both a particular stage and its relationship to the entire lifecycle.

The first paper in this Acquire, Serve, Grow, and Retain series, examines factors driving customer acquisition and outlines a systematic process to attract and build a profitable customer base. With that information an organization can develop a targeted customer acquisition and retention strategy and up-selling programs as well as leverage the desired communications channels in order to improve lifetime value.

Serve, our second paper, discusses approaches to identify how well you satisfy customer needs with service that meets or exceeds their expectations.  We also discuss whether the targeted customers you have secured will remain satisfied and loyal or whether they will leave due to dissatisfaction with the products or services you are providing.

In that paper we define a service process based on the fact that not all customers have the same expectations and criteria for superior service delivery. Consequently, it is useful to segment the customer base and identify the unique requirements of various purchasers at each touch point. This makes it possible to develop service delivery standards for each function based on meeting and exceeding the needs of each segment. This also makes it possible to optimize both service delivery and service profitability by delivering neither more nor less than what will be experienced as superior service by customers in a particular segment.

Grow is the third in a series of four papers that will discuss how to get the best business results from each stage of the customer lifecycle.











          Fig. 1 – The Customer Lifecycle


Seven Steps to Grow Your Customer Base and Your Customer Revenue Profitably

Successful development of a growing and profitable customer base is a critical requirement for business survival in a highly competitive and economically challenging market environment. Unfortunately, most companies lack an integrated approach to both attract and retain profitable new customers and maximize revenue and profitability from existing ones.

This paper discusses tools and techniques that can be used to create a practical process that focuses on improving the financial results from all customer groups through:

  • Reducing churn
  • Identifying needs by segment
  • Optimizing customer loyalty drivers
  • Incorporating customer requirements into operating processes
  • Creating a customer-focused value proposition
  • Measuring and managing the Total Customer Experience
  • Increasing share of wallet

    Each of these tools can be used individually and quite often are. However, when used in combination to create an enterprise-wide, holistic view of revenue and profit opportunities in prospective and existing customers, they produce a customer-focused operating framework that improves marketplace performance and business results.

    1.  Don’t Churn Away your Revenue and Profits

Among the findings of a recent Chief Marketing Officer Council study, “Business Gain From How You Retain,” respondents say customer churn significantly impacts business performance through revenue loss (59.9%), reduced profitability (39.6%), and greater marketing and re-acquisition costs (36.3%).

An existing customer base contains real growth potential, but many companies fail to realize its full potential. Often, more energy goes into attracting new customers than looking after current ones.

However, it is generally recognized that the longer a customer stays with a company, the more that customer is worth. Long-term customers buy more, take less of a company's time, are less sensitive to price, and bring in new customers. Best of all, they have no acquisition or start-up cost. Good long-standing customers are worth so much that in some industries, reducing customer defections by as little as five points from, say, 15% to 10% per year-can double profits.

“Churn” relates to both customers’ defections and to the loss of value from customers who remain. So “churn rate” refers, on the one hand, to the percentage of customers who end their relationship with your company or, on the other hand, to the customers who still use your products or services, but in less volume or not as often as they used to. The difficult challenge in developing effective approaches to reducing both kinds of churn is to be able to identify predictors of each type of churn and take corrective actions to address the problem.

Predict Customer Defections and Reduced Purchasing

Most companies have large amounts of data on customer purchasing behavior, although it is frequently in several different databases. Fortunately, technology is available to merge these disparate sources of data and provide the necessary predictors of churn.

Predictive Analytics

Predictive analytics is data mining technology that uses your customer data to build a predictive model specialized for your business. This process learns from your organization's collective experience by leveraging your existing logs of customer purchases, behavior, and demographics. The wisdom gained is encoded as the predictive model itself. Predictive modeling software has computer science at its core, undertaking a mixture of number crunching and trial and error.


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A predictive model tells you which new customers are likely to return and which are probably one-timers. The model is created with data mining methods that "learn" from the collective experience of your company contained in your sales records. The model then applies what has been learned to produce a predictive score for each new customer in real time.

In this way, new customers you would otherwise never see again are targeted and enticed to stay. Because you don't waste the retention offer on new customers likely to return, the numbers work out very well. The growth rate and medium-term profits potentially skyrocket, and immediate-term profits are not put at risk.



If you would like a copy of Acquire, or any of the other whitepapers in the Get Better Business Results series, they can be found in the reference section of our website at, or feel free to contact us for assistance.