Organisations know that they should focus more on customer value, but find it hard to identify how to do this while also creating business impact. Customer lifecycles help organisations do this by structuring the phases of a customer relationship and aligning business processes to customer experience. Lifecycles represent an outside in perspective of what customers experience across a sector.

Taking an outside-in perspective reveals patterns in customers' use of a service

Tracking customers in a sales funnel, a segmentation model, or incident logging does little to help businesses understand customers. Taking an outside in perspective reveals that customers go through the same phases of becoming aware, deciding, acquiring, using and reconsidering use of a product or service. These phases relate to the way customers experience a product, not how businesses see them.

Lifecycles help to understand customers better

Customers experience the same things at common intervals; changing mobile contract every two years, buying a car every five and changing insurance every seven years. Knowing what happens to customers in every phase of their lifecycle is not hard to find out as most people go through phases at similar times. For example early use of a product in the first four to twelve weeks and reconsidering options a couple of months before the end of the contract.

Lifecycles help to understand customers better
There are specific phases in the customer lifecycle where most customers have issues and incidents. These hotspots can be better understood by engaging customers and staff.

… help find customer hotspots

There are phases and stages in the lifecycle where customers suffer service failures and irritations. These ‘hotspots’ lead to customer incidents, complaints and even defections. There are also hotspots around unmet needs and wants of customers, where none of the actors provide adequate service.  Hotspots are a great place to start to understand the experience and behaviour of customers.

Over 60 percent of all customer incidents can be directly attributed to the new customer phases of the customer lifecycle.

… find points where to improve customers’ experience

Knowing hotspots does not mean that the source of the failure or the potential opportunity is clear. The common approach of ‘fixing’ an incident or a problem process does not prevent the (re)occurrence of problems.

The point where to intervene in the customers experience is usually in earlier phases of the lifecycle. Improving the customer onboarding or helping them through the early use phases can significantly improve customer’ experience.

… find points where to improve customers’ experience
Customers have a negative experience when their expectations are not met. Meeting basic service expectations leads to a significantly better customer experience.

… and design services that have major impact on customers

Understanding the phases of the customer lifecycle provides a solid foundation to design services to meet and exceed expectations. Acting instead of reacting to customers can be cost effective when taking into account the total cost of service failures, including customer defections. More importantly, meeting customers’ service and support expectations can lead to better customer relationships and higher loyalty.

Customers’ experience facilitates internal alignment

Organisations trying to close the gaps between departments by introducing or changing processes struggle in what to address and where to start. A strong focus on delivering customers the best possible experience can help organisations in mapping internal and external customer-facing activities. Aligning business processes and departments with the customer lifecycle creates a smoother experience for customers and staff alike.

Achieve organisational alignment with lifecycles

The customer lifecycles are an external view of what customers experience when they are engaged by an organisation. This perspective does not change from department to department. By taking the customer lifecycle as a consistent context, organisations can align their processes and practises to deal with cross-functional challenges such as improving customer experience or reducing churn.

Customer lifecycles help attract, service and retain customers

The customer lifecycle maps the phases of the customer experience and enables businesses to better understand the cycle of customer involvement. This enables organisations to pinpoint hotspots and design an intervention or service that impacts the customers. The real value lies in translating the desired customer into an aligned approach across functional silos.

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