Predictive Marketing

Chapter 7Play Three: Predict the Customer Journey for Life Cycle Marketing

In Chapter 4 we recommended that you look to optimize the lifetime value of each customer. In this chapter we look at the life cycle of a single customer in more detail to see how our strategy should include all stages of customer life cycle from acquisition to growth to retention. We start by looking at a simple customer life cycle or customer journey and then see how segmenting customers based on their life cycle stage can yield great insights and opportunities for customer growth. We also give you an overview of life cycle marketing strategies.

The Customer Value Journey

The basic principle of optimizing customer lifetime value is the same for all stages of the life cycle and can be summarized in three words: give to get. Customers are much more likely to buy from you if they have a relationship with you. The best way to develop that relationship is to deliver an experience of value. So to get customer (lifetime) value, give customer value.

Figure 7.1 shows basic concepts of the customer value journey. Customers will disengage you if they are not getting value from the relationship. The definition of value is very different from company to company and it ranges from monetary value, especially in business marketing, to utilitarian value such as when using a great vacuum cleaner, to the self-confidence you may feel when wearing a designer dress. Whatever your definition of value, if customers are not ...