What is Customer Life Cycle and How to Calculate CLM
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Customer Life Cycle is the journey your customer goes through from when they first hear about your company (perhaps through an online ad or Google search) through to when they become a regular customer, and all the steps that get them there. Understanding this cycle is important for many reasons, but perhaps the most important of all is because it helps you to provide the best customer care.

According to Forbes it costs a lot less to market to an existing customer than to attract a new one.

Ideally, loyal return customers are the best kind to have. Not only do they cost you less in your marketing efforts, but they also become advocates for your company or brand. The experiences you leave them with ultimately define you as a company, and they have a huge impact on your profits.

So, let’s take a look at what your Customer Life Cycle (CLC) is all about, and how to use it to calculate your Customer Lifecycle Management (CLM).

Stages of the Customer Life Cycle

customer life cycle

Reach / Stranger

The reach stage is your first point of contact with your potential customer. You attract these strangers through organic and paid marketing efforts that answer broad questions and search terms used by people who may eventually find your product useful. You promote this content through Social Media, AdWords, anywhere that your target market spends their time online.

Acquisition / Conversion

This is where your customer becomes a lead. They have shown an interest in your service or product and in your content from the Reach stage. They have filled in an E-mail address. Now you have contact them directly with a personalised message, and also make sure you have implemented remarketing so that they continue to see your product wherever they are online. At this stage, you are nurturing potential leads.

Customer Development / Nurturing

This is where your customer care becomes really important, because you want to take the one-time customer through to the next stage – repeat customer. Make sure they are happy with their purchase. Ask for feedback and offer them any tips on caring for their product now that it has been delivered.

Return Customers / Loyal Customer Care

Thanks to your clever marketing efforts and customer care, your one-time customer returns and becomes a repeat customer. Here again, ask for feedback for improvements on your product and service – then follow up with them and let them know how you are improving.

Promoters / Advocates

At this stage, you have achieved the ultimate in customer satisfaction. Your customer is now advocating your products to their friends and family. At this stage, your ROI on the time you spent on customer care becomes worth your while.

As you can see, having customers who are happy with your product and advocating it to their peers is extremely valuable to any brand. Customers trust the opinions of people they know, and are more likely to buy from a company that has been recommended to them by a trusted friend. So, by spending a bit on customer care you are actually saving on marketing. The new customers you attract through word of mouth (by your advocates) are more likely to make a purchase than those people who simply found you online in a search, because they already trust you.

Customer Lifecycle Management (CLM)

Now that you understand what the customer lifecycle is all about and why it’s important to keep your customers happy enough to keep coming back, you can understand why it’s important to manage that customer lifecycle closely.

customer life cycle management

You must ensure that you are providing the best possible service to your customers, and that means you need to know where they are in the cycle, what their needs are, and how to keep them happy. For large companies, this is a full-time job in itself. If you are a smaller operation you will have to manage it yourself. Either way there are great processes and systems that can help you.

Customer Lifecycle Management or CLM.

Customer Lifecycle Management is the measurement, analysis, and management of your customer related metrics.

"The purpose of the customer life cycle is to define and communicate the stages through which a customer progresses when considering, purchasing and using products, and the associated business processes a company uses to move the customer through the customer life cycle." Claudia Imhoff

So, how do you do it?

You have to have a clear understanding of both your product and your customer. The biggest tool at your disposal in customer lifecycle management is your data. Naturally, you can’t have your own data before you launch your company, but you can learn from the experience of others.

Following trends within your market is an essential part of the process. Hand-in-hand with market data is customer data. Because the two are essentially the same thing. You need to get a clear picture of who your customer is and what they need at every stage of the lifecycle process.

You can set up your process by tracking your activity in each stage of the cycle above.


Start with your Buyer Personas. Look at who your customers are and set up two or three dummy profiles to help you identify them. This will help you to market your product more effectively by delivering the right message to the right people on the right platform. Track where your website visits come from to discover where your customers are finding out about you. Then you need to use all available demographic information about them to help you personalise your message. If your main buying demographic is females between the ages of 45 and 60, then you must adjust your message to be appealing to these women. Find out what their concerns are, what their goals are, and where they spend their time online.

how to find a buyer persona


When your customers have reached this stage, you should be able to find out a bit more about them. What motivates them to purchase? What makes them apprehensive? How can you provide the best possible customer service for them without chasing them away? You don’t want them to feel harassed, but you do want them to have everything they need from you to be able to feel that their needs are being met. You should typically have added them to your mailing list by now.

Customer Development / Nurturing

Now that your customer has made their first purchase and is on your mailing list, you can start to get more information from them. At this stage you will be collecting more specific data. If you have had questions about what does and doesn’t work for your clients now is the time you can ask them. Lead with questions that ask if they are happy with their purchase experience. Ask them what they enjoyed about it and what they would change, if anything. They will feel that you value their opinions and you will get valuable information on how to improve your service, and ultimately your sales.

Return Customers and Advocates

customer rewards

These are your most important customers. They are making multiple purchases and they are advertising your products. They also cost you the least to remarket to. Provide these customers with the tools to share their good experience with your brand. Offer them rewards or competition entries for submitting reviews about you on your Social Media channel and make sure they know how to share your page, website and product information with their peers.

Final thoughts on CLM

The most important points for you to take from this article are to keep track of your customer data and to make sure you are providing the correct customer service to each stage of the customer lifecycle. Your existing clients are your best advocates.

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