Use the Five Stages of the Customer Lifecycle for Higher Conversions

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Getting a higher conversion rate means effectively getting a higher percentage of your website visitors to take a desired action. However, you aren't going to increase your conversion rate much without understanding where your visitors are in the process of buying your product or service and how you can serve their needs at each stage. That process is called the customer lifecycle.
 

Example – New Car Shopping from the Buyer's Perspective

 

Its perhaps easiest to understand the customer lifecycle by thinking through a large purchase decision that most people make – buying a new car.

Traditional marketing typically recognizes 4 stages in the customer's journey (typically known by the acronym AIDA):

  1. Awareness
  2. Interest
  3. Decision
  4. Action

These are the mental steps someone goes through before finally purchasing. A customer can move through the stages very quickly or very slowly or some combination of both.

Think about the last time you bought a new or used car. Now think in terms of the 4 stages:

  1. Awareness – from driving on the road and seeing other cars, talking with friends or family, or seeing advertisements, you grew in your awareness of what types of cars are out there to purchase. Since cars and advertisements for cars are everywhere, you may not have even been conscious of the fact that your awareness of the car market was increasing over time.
  2. Interest – at some point you started thinking about buying a car. It may have been dissatisfaction with your current car, your life situation may have changed and you felt you needed a new option, you may have ridden in a car a friend owned and really liked it, or maybe saw a car that caught your attention in a parking lot. You then decided to start actively looking for a newer car by talking with friends, reading online reviews, reading Consumer Reports or some other industry review service, browsing Craigslist, checking your finances to see what you can afford, and taking some test drives at local dealerships. This process is helping you narrow down your options to focus on the best car for you.
  3. Decision – you have now decided on what make and model of car to purchase. You are now trying to decide whether you want to buy the car on the used market or to work with a dealer. You decide on working with a dealer and are now considering which dealer to go with. Which one seems the most honest? Which has the best reputation? Which has the make and model for the price you want?
  4. Action – you decide on a dealer, negotiate a price, and purchase the car. Your journey through the four steps is complete.

Time to Modify the Traditional Model – Add a Fifth (or Sixth) Step and a Less Linear Process

 

The four steps above have been used in graphical terms to describe what is called the “sales funnel.” It looks something like this:

It's called a funnel because of its shape and purpose. At the top of the funnel in the “Awareness” stage, there are more people. The number of people that are aware of the various cars on the market is very large.

As you move down the funnel, the number of people in that stage decreases. There are a lot fewer people interested in buying a car than there are people aware of the cars in the market. Even less are the people who are actively making a decision to buy a car. And fewer yet are actually buying cars on a daily basis.

The Customer Lifecyle Marketing Model

 

The customer lifecycle model is very similar to the sales funnel and AIDA framework with a few exceptions:

  1. It recognizes that a customer's journey from the top of the sales funnel to the bottom isn't always linear (people can change their minds and move up the funnel instead of down).
  2. It wants to pay close attention to what customers do after the sale – whether they tell others about the product they bought and the company they bought from and whether they will become a repeat customer or not.
  3. It recognizes that in the online world, a company needs to be marketing to a customer continually not only through its own marketing channels, but through channels it doesn't own like social media, customer reviews, and business review sites which are less “controlled” by the company.

Here is how Smart Insights, a digital marketing firm, graphically demonstrates the lifecycle marketing model with their terminology:

(Image courtesy of Smart Insights)

Let's look at each of these new insights offered by the lifecycle model for a moment and how they might affect your own marketing.

  • Non-linear process – you can't always expect to move a customer from the top of the sales funnel to action on their first website visit. Of course it is nice if you can and you should still try. But for those that don't buy, think of the customer lifecycle in terms of an ongoing relationship where you can build trust, answer questions, and nurture a customer toward action over time.
  • Less control – realize that customers may be evaluating your product or services or company on other websites before they purchase from you. Your reputation online is going to matter quite a bit to people who are used to doing their due diligence before purchasing.

More Steps – Advocacy and Loyalty

 

The traditional sales funnel does not address what a customer does after purchase. Optimally, a website owner wants them to do two things:

  1. Advocacy – Tell others about their positive purchasing experience in order to get word of mouth business
  2. Loyalty – Become a repeat customer by purchasing again

Every business wants that valuable (and free!) word of mouth advertising. If you can get a highly satisfied customer to advocate for your business and what you are selling, that is a huge win. Such advertising costs nothing and since the customer isn't employed by you, they are viewed as a financially unbiased source of information by whoever is listening to them.

Additionally, why would a business be happy with one sale when they can get multiple sales from the same customer? Marketing books have taught for decades that a new customer is much more expensive to acquire than an existing customer. Any business is smart to focus on selling more to their existing customer base by earning long term loyalty.

Adapting the Customer Lifecycle Marketing Model for Your Needs as a Site Owner

 

Now its time to start thinking about how you can take advantage of the customer lifecycle model for your own web site. Let's start from the perspective of the customer and then include how you as a seller can engage them at each stage of the lifecycle. I have adapted these labels from Smart Insight's RACE Planning system and traditional sales funnel language. I have also broken out advocacy and loyalty into their own stages since they are two different types of behavior.

Please note that you won't know exactly which stage of the lifecycle your website visitors are in when they come to your site unless you are tracking them via your email marketing, advertising on other channels, through affiliate programs, and so on. Even then, you won't know unless they actually tell you via survey, chat, or other system you have set up (which makes having those systems in place even more strategic).

Stage 1 – Exploration and Discovery

Website visitors in the exploration and discovery stage are not actively looking to purchase your products or services. They probably don't know much about who you are or what you have to offer.

Questions visitors may ask of your website during the exploration and discovery stage:

  • Where do I go for help online?
  • What does this site offer me?
  • Can I trust what I am reading?
  • Are these people competent to solve my problems or answer my questions?
  • Do other people trust this site?
  • Is this worth my time to read?

Often these questions are completely overlooked by website owners like you and me. We know our businesses so well, we forget what it is like to not have the knowledge we do.

What visitors may do on your site during this stage:

  • Evaluate your site name and marketing messaging for trustworthiness and relevance
  • Read a blog post or information page to see if you can answer a question or solve a problem
  • Look at your navigation to see what your site has to offer

How you can serve visitors in this stage:

  • Answer questions
  • Establish trust
  • Start up a longer relationship in some way (capture an email address, offer a free trial, etc.)

Action Steps:

Since you are working on your site constantly, and know your business inside and out, it is often hard to put yourself in the mindset of someone in this first stage.

To know what it feels like, do a search in an industry you know nothing about. Visit a couple websites. What questions are running through your head? What do you look at first when you visit a new site? How well are those sites serving you as someone completely new? Now go back to your own site – how well are you serving visitors in the exploration and discovery stage?

Stage 2 – Decision Making

 

Visitors in this stage are now more familiar with who you are and what you have to offer. They are now considering whether you are the best choice to solve their problem and if they can trust you with their money.

Questions visitors may ask of your website during the decision making stage:

  • Is this the best option, compared with other sites I have visited, to solve my problem?
  • How much does this cost?
  • Is the cost reasonable for what I am getting?
  • Is this going to last a long time?
  • Can I trust this company to do what their marketing promises?

What visitors may do on your site during this stage:

  • Check pricing
  • Check shipping and delivery information
  • Look for guarantees
  • Watch videos
  • Read FAQs
  • Look at your trust seals to see if you are a safe entity to purchase from
  • Read reviews and/or customer testimonials to see if your product or service adequately solved the problems and needs of others

What visitors may do on other sites during this stage:

  • Compares prices
  • Search for reviews on your company and others you are being compared with
  • Look for reviews on your products or services and those you are being compared with
  • Ask friends on social media if they have any experience with your company

How you can serve visitors in this stage:

  • Address any questions or concerns via FAQs, product information areas, chat, email support, telephone, etc.
  • Answer how your product or service can solve problems and meet needs
  • Make all vital information very easy to find and view
  • Display any guarantees prominently

Action Steps:

Its easy to become blind to what you might be missing. There are plenty of action steps I could suggest here but one that is very helpful is to hire a user testing company. What these companies do is use real people to navigate your website and then record their experience based on a task you give them. You can then watch the recorded videos and see what information and tasks these sample visitors can see and do and what they are struggling with. Here is one company I have used for this many years ago. They were one of the first to offer this service. Again, I haven't used them for years to know about their current pricing or quality but I still see them recommended now and then.

If you don't want to pay a company's high prices for user testing, I am sure it wouldn't be hard to set up your own testing by hiring freelancers at sites like Upwork and Fiverr.

Stage 3 – Purchasing

Now your website visitors are convinced you are the right company to meet their needs and they have decided to purchase from you.

What's important about this stage is that a customer is actually able to complete the buying process. With the number of people that actually abandon their shopping carts without finishing a transaction, this step is more important than many site owners realize.

Questions customers may ask of your website during the purchasing stage:

  • What is the process for purchasing this product or service?
  • Do they take my preferred form of payment?
  • How long will it take for me to receive what I am buying?
  • Is the transaction technology safe to use?

What customers may do on your site during this stage:

  • Create a user account if desired or necessary
  • Work with your shopping cart forms
  • Look for payment information
  • Look for help if they are having trouble completing the process

How you can serve visitors in this stage:

  • Offer a tested and streamlined ordering process that is as easy to use as possible
  • Have lots of helps ready for customers who have questions about completing the process
  • Reassure the customer that your shopping cart technology is secure

Action Steps:

Make sure you have analytics that can track the purchasing process. What percentage of visitors abandon their shopping carts? Do you know why they don't complete their purchase?

Stage 4 – Telling Others

 

This stage is one that is often overlooked but is a great opportunity to get free word of mouth advertising.

Stages 4 & 5 can often be switched. For the sake of this article, we will assume a customer is ready to share after the first purchase and deciding whether or not to do so.

Questions customers may ask during this stage:

  • Is this product, service, or website worth telling my friends about? Is it something I feel comfortable recommending?
  • Did the product or service really meet my needs?
  • Is there anyone else I know that would benefit from this product or service?

What customers may do during this stage:

  • Share their experience on social media or in offline conversation
  • Complain to others if their needs weren't met

How you can serve visitors in this stage:

  • Ask your customers to share their experience if they were satisfied. Ask them to contact you if they aren't so you can help them.
  • Offer “2 for 1” or other discounts a customer would want to share
  • Tell them about other services they or their friends might want

Action Steps:

Think about what processes you have in place to encourage your customers to share their experience with others. If you have done a good job serving them, tell them how much you would like to serve their friends and family also.

Stage 5 – Staying Loyal

 

Repeat business is far more strategic than focusing the majority of your attention on one-time customers. Always try to increase the long term value of your customers by selling to them again and again.

When your customers begin the process of buying something different, they may go back to stage 1 or stage 2 at this point. You have an advantage because the customer has already trusted you with one purchase. If you've done a good job, you have already overcome several barriers that will need to be addressed by a company that is unknown to the customer.

Questions customers may ask during this stage:

  • Does this company/website have anything else that I need?
  • Was my experience with this company satisfying enough that I want to do it again?
  • Were my needs met with my first purchase?
  • Why should I buy from this company again and not someone else?
  • Are their other products going to satisfy me the same way this first one did?

What customers may do during this stage:

  • Revisit your website to search for solutions
  • Respond to any follow up marketing you send
  • Revert back to stage 1 or 2 and look for solutions on other websites

How you can serve visitors in this stage:

  • Clearly communicate what other needs and problems your company helps solve
  • Follow up with your customer to see if their first purchase is adequately meeting their needs
  • Offer any financial incentives to keep doing business with you

Action steps:

Think through any processes you have to encourage repeat business. If you don't have any, think through companies you are loyal to. Why do you keep going back to them? What companies did you buy once from and never return and why?

Developing a strategy to retain customers and build long term loyalty is a strategic move that many solo entrepreneurs overlook. Too often, gaining new customers takes a much higher priority than retaining existing customers. With how easy technology makes it to follow up these days, there is no reason not to have follow up processes in place.

Conclusion

 

I hope that learning about the stages of the customer lifecycle helps you think more strategically about how you can serve your website visitors regardless of what stage they are in. It is so easy to think of your website visitors as just another analytics number instead of real people with varying needs at differing points in their purchasing journey.

If you change your thinking and start addressing customer needs at various points of the cycle with your website, you'll be far ahead of many of your competitors and you will see your conversion rate increase.

Helpful ResourceUse An Email Marketing Automation Service to Constantly Keep in Touch With Your Customers

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Jim Rosenquist

Jim Rosenquist

Jim started earning a living online in 1999 and became a solo entrepreneur in 2001. He started Solo Intel in 2019 as a way to help solo entrepreneurs and small operators become more strategic with their online business.

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