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E-Commerce Customer Lifecycle: A Brief Introduction

In this blog post, we’ll be discovering the e-commerce customer lifecycle as a strategic theme to be used in guidance for a more successful customer relationship.

We’ll be tapping areas like:

-Why focusing on already active and repeat customers matters-What are the stages within this lifecycle

-How to position your customers in certain segments during this lifecycle

The ecommerce customer lifecycle

We all know that driving the attention of new customers into our store is getting more and more costly. Therefore, it makes total sense to focus on our already active existing customer base, to maximize the total lifetime value over there. And actually, this is the core of customer lifecycle marketing, i.e. focusing on the loyal, active customers and being concerned about generating more of this type of customers in your customer base. So, in addition to acquiring new customers out of blue, customer lifecycle marketing also contains strategies that help you to nurture your customers into this exact loyal status.

To achieve that, we should also be defining other stages in the customer journey, so that we can see the paths leading these customers into desired stages, here active, repeat customers. Here, we’ll be naming these other stages by the common consumer characteristics that we encounter in each stage.

Prospects

These people are not cold at all. So, they made the first contact with you either through signing up for your newsletter or joining in a marketing competition or something, but again, they are not that far from you.

Action: Push them towards buying their first item from your store

Active customers

The sweet spot. These customers have already tried buying things from your store, and maybe they also repeat that in a certain frequency. However, the word ‘active’ totally relies on the business model of your webshop, therefore it requires further analysis to be conducted on the historical shopping data of your customers.

Depending on the repeat behavior of clients, we can segment the active customers into 2 by one-time purchasers, and repeat purchasers. However, the action to be taken here does not differ much in these 2 sub-segments.

Action: Keep these customers engaged and eager to buy new things

Lapsed customers

Here, we require a certain threshold derived from the order gap analysis mentioned above, which would imply us whether a customers frequency of purchasing has lagged behind its normal frequency. So, in this case, this customer should be feeling not active anymore. Therefore, as soon as you detect such behavior in the lifecycle, you should do your best not to lose the cream of the segment in your customer base.

Action: Retarget them to gain back and to align in their normal purchase frequency

Lifecycle marketing strategies

As soon as you manage to put your customers into one of these segments, you can target them specifically to nurture the paths that lead them to become active customers, maybe for the first time or again.

You could also do further segmentation depending on other signals you see from your overall marketing operations and sales figures.

For example, you might have VIP’s, whose total spending is way above the average and actually might be implicitly expecting special treatments to remain active in your customer base.

You can also call your customers as warm or cold, according to their interactions with your marketing operations. (e.g. e-mail opens, retweets, favs. etc.)

Following such segmentation, actually finding the proper call-to-actions leading your customers towards the more active segments is way clearer. A few examples where we could apply this segmentation knowledge are:

At the welcoming stage: Touching your potential customers right after the very first contact they make with you, gives a clear signal for them that you value loyalty, and this might encourage them to get them buying from you, starting with their first order.

Right after the purchase: As we stated above, engaging your active customers further is also a valuable strategy considering the fact it increases the lifetime value of your customers. Therefore, aiming at the customers who accomplished their purchase also makes sense, because you can encourage them to repeat that behavior.

For reactivation: If you start seeing risky customers who have lapsed according to their normal repeat behavior, then you should be doing something to tempt them back to purchase things again from your webshop.

To sum up, as the subject of this blog post implies, our aim with this post is to get started with segmentation-driven thinking in e-commerce, and aligning strategies with this thinking.

As we improve our segmentation within our customer base, finding out the right methods of communication that will encourage more and more customers to fit into the active, repeat customer segment will be a clearer path for all.

Good luck with it, we wish the all the best of returns on investments 🙂

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