Customer Life Cycle in E-Commerce

Hi All,

There is a lot of sense in maximising the lifetime value of your existing customers to shop your store again and again, since building new customers is growing costly.

This idea of developing a base of active, revenue-generating customers is what lies at the heart of customer lifecycle marketing. The more you have this type of customers, the better will be your lifecycle marketing efforts.

You can increase the loyalty and lifetime value of your customers by splitting their journey into various stages and also formulating methods to activate them.

Prospects

Those people who have given their details such as email, signed up for your newsletters or have created an account are called as prospects. These are people who are still to start a purchase from you.

Active customers 

A customer who makes a purchase within expected frequency time interval or who has made a recent purchase is known as an active customer.

Based on your product life cycle and business model, your meaning to 'active' definition can be varied.

The active customer category can be divided into two segments.

• One-time purchasers - Customers who have made one purchase recently.
• Repeat purchasers - Customers who have made more than one purchase and are buying at regular time intervals.
  
  

'At risk' customers

Customers who cross the expected time interval without making next purchase will come under this category. If you have set an expected time interval as 3 months then when a customer goes beyond this time without making his/her next purchase then you can do actions to activate that user.

‘Lapsed’ customers

A customer who has not made a purchase and has gone far beyond the expected time is a lapsed customer.

Life-cycle marketing strategies

Once you are clear in segmenting your customers into any of the above mentioned categories, you can set specific strategies with an aim of activating them. You can create such as:

• VIP status: Create this strategy for customers who make high value purchases (also look for lifetime spend), high number of orders and purchases more frequently.
• Warm status: Enquire yourself about customers who respond to your marketing messages (e.g. viewing your emails, visiting your website).
• Pre-purchase campaigns: Encourage your product brand by introducing new subscribers and hold your customer loyalty and have a customer base before making them to purchase initially.

• Post-purchase campaigns: Set this strategy for improving your customers' further purchasing ability.
• Reactivation campaigns: Target your lapsed customers and customers who are about to lapse, by attracting them to buy from your store.
• Replenishment campaigns: Keep your customers active by reminding them to re-purchase your products.

You can also create more strategies to boost your inactive customers at various life-cycle stages. For example, you can present offers for abandoned purchases, by sending cart abandonment emails to those customers who have abandoned your product. This tactic is useful for customers, who are 'lapsed' or 'at risk', and also can give more promotions or discounts to push them to shop your products again.

Ideas shared from: https://www.ometria.com/blog/ecommerce-customer-lifecycle

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