Keep Churn to the Bare Minimum Using Lifecycle Marketing

You don’t need to be a marketing guru to know that customer churn is bad, and customer retention is good.

It’s odd, then, that sales and marketing teams around the world use the sales funnel as a guide for how consumers should flow through their organization.

See, funnels are built so that whatever’s inside will eventually depart. In using a funnel as an illustration of the customer journey, we acknowledge the idea that customer churn is inevitable.

(Which, to be sure, it is: 100% of your customers will eventually part ways with your brand at some point in the future.)

But:

Acknowledging that churn is inevitable can unwittingly cause your team to become complacent—creating even more churn as a result. If your sales and marketing teams see churn as imminent and unavoidable, they might not put all that much effort into trying to avoid it.

As helpful as the sales funnel may be in terms of visualizing your customer journey, it can also make churn somewhat of a self-fulfilling prophecy within your organization. Couple that with the sales funnel’s impersonal, templated approach to engaging with customers at each stage of their journey, and you’re going to be losing customers left and right.

Luckily, there’s a better way to visualize your customer’s journey with your brand—one that doesn’t focus on the inevitability of customer churn.

Enter lifecycle marketing.

What is Lifecycle Marketing?

Lifecycle marketing is the practice of tailoring the way you approach individual audience members based on where they are in their journey with your brand.

Note the key differences between lifecycle marketing and marketing using the sales funnel:

For one, lifecycle marketing focuses on providing individualized value to each and every customer based on their specific needs at any given time. The sales funnel model, on the other hand, can easily lead teams to take a “one-size-fits-all” approach where they deliver the same value to all customers at each stage of the funnel.

Secondly, lifecycle marketing aims to continue building the relationship with individual customers at all times—with a major focus on post-conversion engagements. In contrast, the way the sales funnel is often visualized focuses on the leadup to the sale—and neglects continued engagement with current customers.

(Again, this leads to the self-fulfilling prophecy of “inevitable” churn.)

The main difference between the two:

Sales funnel marketing focuses on the company’s goals, while lifecycle marketing focuses on the customer’s. In taking a customer-centric approach to engaging and providing value to your audience, you’ll have a much better chance of staving off churn as time goes on.

Using Lifecycle Marketing to Minimize Avoidable Churn

From a bird’s-eye view, there are five key stages to the customer lifecycle:

• New Prospects who have just hit your radar and just learned about your brand
• New Customers who have recently converted but are not yet acclimated with your brand
• Active Customers who have been with your brand for a while and used your products or services with great success
• At-Risk Customers who’d previously been active and engaged but whose engagement levels have since dropped
• Churned Customers who are no longer doing business with your brand

In contrast to the sales funnel, the goal isn’t always to move the customer through the lifecycle. Rather, it’s to elevate them to active status—and keep them there. Knowing that a decrease in engagement is a key indicator of imminent churn, it’s crucial to keep your audience as active as possible.

Now, let’s look at the key ways to make this happen.

Proactively Avoiding Churn in New Prospects

In the early stages of a new relationship with a potential customer, it can be easy to focus on making a sale at any cost.

That last part—”at any cost”—is the problem: making a single sale usually doesn’t mean much if it doesn’t lead to long-term gains for your company.

So, instead of looking to convert just any ol’ prospect, you’ll want to ensure that doing so will be the start of a long-lasting relationship.

Above all else, this means attracting only the highest-quality leads. That is, the ones who will be easiest to convert—and most likely to stick around for some time to come.

One key way to do this is by utilizing Lookalike or Similar Audiences in Facebook or Google, respectively. Focus on mimicking your most valuable and most engaged customers—while also taking note of how your team nurtured them to this status. This will allow you to deliver highly-targeted ads and content to these prospects, who will then take their first steps in their journey with your brand.

Once a prospect has taken this initial step, you then want to get on the same page as them regarding their goals and expectations for engaging further. You can do this by sending out pre-purchase surveys and feedback forms with your initial welcoming messages.

The idea is to get started on the right foot with your best-fit prospects—and weed out those who are a poor fit for your company. If you can make this happen from the get-go, you’ll likely see immediate improvement in your churn metrics.

Avoiding Churn in New Customers

Once you’ve converted a customer, you’ll immediately want to focus on retaining them for the long haul.

Note that this doesn’t necessarily mean focus on getting them to buy again.

Rather, concentrate on giving your new customers exactly what they need to move forward in their journey and begin accomplishing their goals.

As the provider, you have a number of tasks to take care of.

First, you need to provide a comprehensive, intuitive, and empowering onboarding experience to your new customers. Here, you’ll be:

• Delivering robust instructional content tailored to specific use cases
• Reaching out with timely and/or behaviorally-triggered prompts to keep customers on track
• Gradually unrolling features to users as they need and are ready to use them

You also want to showcase any tangible growth your new customer has shown since they converted. This may be easy to do in some cases (e.g., tracking SaaS tool usage and progress), but more difficult when it isn’t possible to directly observe your customers. In these cases, you can make it easy for them to track and share their progress on their own. For example, if you sell fitness equipment, you might create an app for your customers to schedule their gym sessions and log their workouts.

Finally, you need to prepare your new customers to take the next step toward even bigger goals—ones they’re only just beginning to recognize. So, your hypothetical fitness company might showcase more advanced equipment to fledgling customers who have shown quick progress with your baseline offer.

As your new customers look back on what they’ve already accomplished, and look forward to what they could accomplish in the future, they’ll be primed for true activation. Once they’ve reached this point, their chances of churning before engaging further are slim.

Avoiding Churn in Active Customers

Your active customers are those who have become regular users of your product and patrons of your company.

Needless to say, you don’t want these individuals to churn. For one thing, you’ll lose a ton of recurring revenue that had almost been guaranteed up until that point. And you’ll lose out on potential future gains—turning back toward acquisition to replace this value.

To keep your active customers active, you’ll need to continue providing increasingly personalized value to them.

A few examples:

• Laser-focused upsell and cross-sell offers
• In-depth content addressing their specific needs and interests
• Development of additional products and services tailored to the needs of “power users”

It’s also essential to personalize the delivery of these offers. This means sending them at the right time via the right channel and/or platform—doing whatever you can to ensure the offer is received loud and clear.

You can keep active customers on board in more “meta” ways, too.

For example, soliciting feedback lets your customers have their voices heard, and potentially improve the value they receive from your company.

In turn, this can enhance your relationship with the customer in question—and allow them to look forward to the next big thing you have to offer them.

Similarly, soliciting social proof and user-generated content enables your customers to recognize and showcase the value your brand brings to their lives. This can keep them engaged in between purchases—and spur additional engagement.

Your active customers are your most valuable, but are also the easiest to take for granted.

Instead of assuming your active customers will always be around, it’s important to know they won’t be. How long they stay on board depends on how long you’re able to provide more and more value to them over time.

Avoiding Churn in At-Risk Customers—and Keeping in Touch with Lost Ones

Just because customers will eventually leave doesn’t mean you shouldn’t fight to keep them around for as long as you can.

Now, in some cases, you might simply need to shoot your at-risk customers timely reminders to stay active with your brand. These reminders, of course, should be tailored to the individual customer’s engagement patterns.

For example, perfume producer Lancôme emails customers when the company starts running out of a previously purchased product:

(Note that this email also includes cross-sell offers in the hopes of getting at-risk customers even more engaged than they were at their peak.)

You also want to avoid instances of involuntary churn, such as when a customer’s repeat order fails due to a technical glitch. Ideally, you’d want to reach them before this happens, and also follow up with them in case they don’t respond.

If it’s clear the individual isn’t worried about missing out on their next round of service, you might need to down-sell them. This may mean offering lower-priced products or subscription tiers, or allowing them to continue using your freemium services:

If you still aren’t able to get your at-risk customers back on track and they end up churning, remember:

They haven’t dropped out of a funnel; they’ve just reached another part of their lifecycle.

Instead of thinking of your churned customers as lost, think of them as dormant. Or, more accurately, dormant for the time being. Unless they’ve specifically requested that you leave them be, make sure to reach out to your churned customers from time to time to stay on their radar.

Want to learn more about how to re-engage your churned customers? Check out our guide to dive deeper.