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Understanding Customer Lifecycles

Written by Anna Milward on June 2, 2015

Email is a great way to drive customer engagement and build relationships but to get the best results you need to send the right message to the right customer at the right time. This means dividing your recipients into groups and targeting emails to each group individually and while there are plenty of ways you can choose to do this, lifecycle emails are among the most effective.

What is a customer lifecycle?

Every person that comes into contact with your business goes through a series of stages from initial contact to hopefully becoming long term, loyal customers. This is called the customer lifecycle and once you understand how it works for your business, it can be a very powerful targeting tool for your email marketing campaigns.

You may have already heard the marketing rule that prospects need to hear your marketing message seven times before they will be willing to buy from you. Although this figure is not backed up by any scientific data, there’s no doubt that it takes regular, sustained contact from you to turn a lead into a paying, loyal customer who will come back to you over and over again and this is where lifecycle emails come in.

Lifecycle emails are intended to target your customers at whatever stage they are at in their interactions with you. By tailoring your message to the level of your relationship you can make sure you are sending the right messages at the right time, and improve your email marketing results.

There are six stages in the average customer lifecycle:

  1. Prospective customers. These are people who are interested in what you have to offer but have not yet decided to purchase your products or services. Your communications to these customers should be geared towards convincing them of the benefits of your products or services so you can persuade them to become customers.
  2. New customers. Those who have purchased your products or services but who you haven’t yet developed a long term relationship with. If you want to turn these customers into repeat and loyal customers it’s important that they feel important. Quality of your products or services will matter here, as will the quality of your customer service.
  3. Active customers. These customers are active and engaged with your brand but haven’t returned to purchase from you again. Active customers that have purchased from you recently may need nurturing and relationship building to help them turn into repeat customers.
  4. Repeat and loyal customers. Once customers have purchased from you more than once they become repeat customers. Even though they probably won’t need as frequent communication as prospective customers, it’s still important that you don’t neglect them. Keep an ongoing dialogue with them, encourage them to recommend you to their friends and give them incentives to stay loyal.
  5. Lapsed customers. A lapsed customer has gone a significant amount of time without interacting with you. This doesn’t mean they don’t like you any more, they may have just forgotten about you. It’s often worth getting in touch with these customers with an incentive or a reason to come back.
  6. Inactive customers. After a certain period of lapsed time, a customer can be reclassified as inactive, or in some cases, abandoned. Some of these people won’t want to hear from you, and it’s important that you leave them alone if this is the case (for example they have unsubscribed from your mailing list). Others you might be able to win back with incentives and a targeted campaign.

Once you have identified your own customer lifecycle, the next step is to create individual campaigns for each of the different stages. Consider what your customers needs might be at each stage and how you can guide them in the right direction to become loyal, regular customers.

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