The business world has seen the rise of numerous paradigms to increase efficiency and profitability. Among these concepts, Customer Life Cycle Management (CLM) has proven to be paramount in recent years. By leveraging the power of new technologies and data analysis, Customer Life Cycle Management can significantly impact your business.
Evolution of Customer Life Cycle Management
Customer Life Cycle Management is not a newcomer to the business world. Yet, the automation tools that facilitate its processes, and the intelligence they add to it, are a recent development. As it has always been, CLM is data and discipline intensive. It thrives on historical data interpretation, understanding customers’ reactions to various nudges, and harnessing these intelligent campaigns & customer insights into smart shopping campaigns. Its intricate nature makes it an ideal candidate for application in reinforcement learning.
Navigating the Customer Journey with CLM
A key aspect of Customer Life Cycle Management is its role in guiding a customer throughout her journey with the brand. This journey can be broadly divided into four key stages:
- New Customer Handholding and Onboarding: This initial stage helps familiarise the customer with the brand, its products or services, and its unique value proposition.
- Active Customer Frequency Driving and Category Addition: CLM focuses on increasing the frequency of purchases or interactions while introducing new categories to the customer.
- High-value Customer Nurturing and Churn Prevention: At this stage, CLM ensures the retention of high-value customers and reduces the chances of their migration to competitors.
- Lost Customer Win-back: Finally, CLM aims to regain the business of customers who have stopped interacting or transacting with the brand.
Dissecting CLM Programs: Recurring Triggers and Personalisation
Each of these stages is subdivided into actionable campaigns like First to Repeat (FTR), Cross Sell, Frequency Driving, On the Brink (OTB) churn prevention, and Winback. These programs are built around recurring triggers, automatically fired for eligible customers daily. For instance, a customer who hasn’t transacted for 90 days might receive a message that the brand misses them and has an offer waiting.
What sets CLM campaigns apart is their focus on smaller customer sets and high levels of personalisation. A classic CLM message is specific, referencing the recency of purchase, the last category bought, and the outlet, and often includes a personalised recommendation.
Evaluating the Effectiveness of CLM Campaigns
From a conversion and lift perspective, CLM campaigns have proven highly effective. Despite contributing less in absolute dollar terms compared to mass or segmented marketing campaigns, they provide significant value due to their focused customer sets. Typically, CLM campaigns contribute 20-40% of the incremental sales generated, but with a conversion rate that’s usually 60-80% higher and yield numbers that are 3-5X of mass campaigns.
To increase efficiency & personalization, you might want to consider reading about the benefits of AI in marketing.
Crafting an Excellent CLM Program
The ingredients for a successful CLM program are:
- Single View of the Customer (SVOC): A consolidated view of customer data, spanning dozens of variables, helps in target criteria setting or personalisation.
- Machine Learning Models: These tools predict propensity scores, offer recommendations, and aid segmentation.
- Campaign Blueprints: Established strategies and plans that define reasons to communicate with all CLM segments.
- Target vs. Control Measurement: A method to assess the effectiveness of the program.
Solus is a leading machine learning-based recommendation system that was built to accommodate these crucial aspects of CLM, providing a streamlined solution for businesses to enhance their customer relations and ultimately, their bottom line.
In conclusion, Customer Life Cycle Management, driven by technology and data analytics, offers tremendous potential to businesses. With its high conversion rates, personalised campaigns, and strategic approach to customer engagement, CLM can significantly boost your business’s revenue and customer retention rates.