Understanding Your Customer Lifecycle
Customer lifecycle is a CRM term that indicates the different stages of a customer in your e-commerce business. It builds up from the moment they browse your store. Product consideration, service of actual purchase, and post-purchase stages. It is essential to better customer retention.
Some may think that selling a product is enough to keep the business going, but this is not the case. Customer retention and customer loyalty are the keystones to navigate a successful e-commerce business. Understanding customer lifecycle enables you to empower these metrics and be more successful in the long run.
My products are immaculate, why do I need to worry about customer retention?
As a dedicated owner of an e-commerce business, you are aware of your products. We know that but sometimes, you can’t predict customer behavior just because your products are excellent. The consumer acts in mysterious ways, and you should be able to adapt to the shifts in their purchasing habits.
Using Metrilo’s Retention analysis, you will have a greater look at customer behavior and their overall worth. With this information, you can act on the most profitable options, and earn even more.
Having great products is a promising factor. Having an excellent understanding of your customers is a total win.
Understanding customer lifecycle can be presented simply by comparing it with everyday situations. If you don’t know a person but you want to talk to them, you will choose wisely how to open and proceed with the conversation.
The same goes for customer retention – you can’t acquire customer attention if you don’t know their interests. With thorough customer retention analysis, you can study your customers’ habits. Afterward, you can present them with the most suitable individual offers.
Metrilo’s Retention – Analyze customer lifecycle for optimal customer retention strategies
A quick guide to accessing Metrilo Retention tool. This software is user-friendly, so you wouldn’t have any problems with growing your business via analytics and research.
- Main Menu – Retention tab
- The default option is Overview. All of the important metrics are there, too. Check Orders per customer and Average time between orders.
- Below them, you will find a color line graph – it compares one-time buyers to the repeated customers.
With all the gathered information, you can establish a stable customer retention strategy for your future profits. We will help you understand every metric, and how to use them most efficiently.
One-timers or repeat buyers?
Simply put, a bigger number of one-time buyers shows problems with engaging your customers. Furthermore, it rings an alarm at customer retention and lack of quality purchasers. If you see such pattern, you should think of creative ways to attract more suitable customers for your business.
The more suitable a customer is, the better chances they have of becoming loyal to your company.
On the other hand, if you see the dominance of repeat buyers you are in a good spot. This shows healthy levels of customer retention. Keep doing what you are doing, good job. Just don’t get overwhelmed by your own success.
How much do my customers buy from me?
There are distinctive one-time-buy products (vehicles, prom dresses, baby beds, etc.). It is totally fine to have a low count on such types of orders. Unless you are selling to heirs of royal bloodlines, there is nothing to worry about.
Although, if your main target is commodities – food, cosmetics, casual clothes – you should be aiming at a higher order count from your customers. If this is not the case, there is a problem in your e-commerce machine.
The reasons might vary from customer service to product quality, engagement and customer satisfaction with your company. With customer retention analysis you can identify the weak spots in your business and act quickly on fixing them.
By using Metrilo details function, you can track the trend movement of a certain product over the years. Maybe you are selling something that was popular two years ago. Do your research, find a better alternative, and implement it in your online store.
If your store keeps growing, you must expect to see an uprising graph when it comes to product purchasing. If you fail to point out such a statistic, you may need to think about shifting your customer engagement and customer retention strategies.
Order frequency and how to push it further
As said in the previous point, some products will have low order frequency. For all other items, you need to study thoroughly how often do people actually buy from you. This information may lead you to innovative marketing approaches and overall better sales. Which, ultimately, means bigger profits.
In general, wider intervals between purchases show lack of motivation from your customers. Your products may be good, but aren’t they too expensive? Or the other way around – you sell cheap but not reliable items? Be sure to know the need to use a product in everyday life, and shift your customer retention tactics accordingly.
Let’s go on the other end of the graph. If some of your products have extremely low intervals between purchases, you can “upgrade” them. Place them as a subscription option, or even a replenishment option. Don’t be afraid to abuse a performing product. After all, they can carry your business for years.
Customer lifecycle and Customer lifetime value
Customer lifetime value (CLV) is essentially the total worth of a customer to your online store. It is generated through their entire lifecycle with your business and is crucial to successful retention marketing. Calculating CLV helps you predict future revenue, and invest efficiently in customer retention.
The usage of customer lifetime cycle and customer lifetime value lets you forecast possible difficulties with your business. If you are spending more to retain a customer with a lower CLV, you will eventually lose money. And, in case of repeated action, this will lead your business to an end.
It is important to understand that every customer has a lifetime cycle with your company. Expecting decades of steady business is plain misleading. Defining every customer’s lifetime cycle, along with their CLV, assures you of your future profits. This brings stability and longevity to your e-commerce business.