The Importance of Customer Engagement

“Customer first” is the new mantra for businesses. Gone are the days when companies hardly paid attention to customer engagement.  A famous 20th century industrialist once said “Any customer can have a car painted any colour that he wants so long as it is black.” It might have been a comment made in zest, but ridiculous in current context, doesn’t it?

The following findings provide an answer as to why customer engagement is important:

  • The probability of selling to an existing customer is 60-70%. The probability of selling to a new prospect is 5-20% (Marketing Metrics).
  • It costs 6-7 times more to acquire a new customer than it does to keep an existing one. [Bain & Co.]
  • 68% of customer defection takes place because customers feel poorly treated. [TARP]
  • A 5% increase in customer retention can increase a company’s profitability by 75 percent. [Bain & Co.]
  • Repeat customers spend 33% more than new customers. [Retail Active]
  • When companies identify and respond to loyal customers, they reduce their customer acquisition costs by 27%. [Jupiter Research]

The findings clearly prove why engaging and retaining existing customers provides a better ROI than acquiring new customers. As they say, “A bird in hand is worth two in the bush.”

Lifecycle Marketing

But how do you engage your existing customers in a meaningful way? A successful marketer should be able to find answers to the following important questions:

  1. Do I understand the evolving needs of the customer? Do I know their journey with the brand?
  2. Can I align marketing communication with the customer’s journey with my brand?

Lifecycle Marketing provides an answer for both.

Every customer has a unique purchase behavior. Some visit your store regularly, some shop only on the weekends, some are high spenders, some love to hear from you, others not. More importantly, they continuously provide meaningful signals in their journey with the brand. Lifecycle Marketing enables monitoring customers continuously for meaningful signals or triggers, so that brands can define their communication strategy accordingly. For example, if some customers are filling your online surveys or opening your emails, it means they are interested.  So it makes sense to target these customers as they are more likely to become loyal customers. Lifecycle Marketing enables you to do that.

Important Considerations for Lifecycle Marketing

A brand must take into the account the following considerations for lifecycle marketing:

  • Omni channel strategy: Customers shop through multiple channels, either by visiting the store, shopping online from a desktop, a mobile device, or telephone. You need to take all channels into consideration while designing the communication strategy.
  • Automated and flexible solution: After a purchase, customers behavior is dynamic. Their needs might change over time. Hence, lifecycle marketing should automatically take care of these responses and should be flexible enough.
  • Real time behavioral inputs: Lifecycle marketing should always read triggers generated by customers and act accordingly.

Steps to Implement Lifecycle Marketing

The following steps help implement a lifecycle marketing campaign:

  1. Define length of lifecycle in terms of days, latency, recency (based on past experience and data).
  2. Lifecycle starting condition ( Based on registration, last purchase, subscription date etc.)
  3. Define triggers or milestones.
  4. Define actions to be taken on milestones based on rules.
  5. Improve rules and communication based on feedback.

An Illustration of Lifecycle Marketing

Lets look at an illustrated example for understanding Lifecycle Marketing. Assume that Boutique Store A sells ethnic wear stylized to suit modern tastes, and has segmented its customers into 3 segments:

  • High value: Customers typically visit the store every 30 days and their average transaction value is above $500.
  • Medium Value: Customers visit the store every 60 days and their average transaction value is above $300 but lesser than $500.
  • Low value: Customers visit the store every 60 days and their average transaction value is lesser than $300

All three customer segments have different purchase lifecycles. Here is how the company created marketing programs for each lifecycle.

Low Value Segment Lifecycle: For low value customers, a mild offer is sent only when they had not visited a store for 60 days. An aggressive offer is sent on day 90.

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Medium Value Segment Lifecycle: For medium value customers, a mild offer is sent when they had not visited a store for 40 days. An aggressive offer is sent on day 60.

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High Value Segment Lifecycle: For high value customers, a mild offer is sent when they had not visited a store for 20 days. An aggressive offer is sent as early as day 30.

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Thus lifecycle campaigns target customers variedly depending on the value they bring to the brand.


Lifecycle marketing maps actual customer purchase lifecycle. It automates marketing effort and is omni-channel.  It provides close loop marketing.