Whether it is the sales funnel or the customer lifecycle – loyalty is what matters
A report this week from Forrester is calling the last rites on the sales funnel. Out goes the framework which has driven marketing planning for many years. In comes the customer lifecycle model.
The new model puts the customer at the centre and suggests that rather than the purchase representing the end point of a linear process, the buying process is now an ongoing circle of constant evaluation of whether you are the right partner, even when you secure that customer.
In many ways, this ‘new’ customer lifecycle model doesn’t really tell us anything new. Organisations have long known about the importance of driving repeat purchases, referral and loyalty through customer care, after sales service and other brand communications. Product development strategies have established a journey enabling customers to upgrade their product / service relationship and account management strategies have evolved to extend the client relationships. If that isn’t putting the customer at the centre of the business then I don’t know what is.
What is worth listening to, however, is the language. The sterile description of the pre-purchase stages of ‘awareness, consideration and preference’ has been replaced with a model which talks about ‘engagement, discovery and exploring’.
I think this accurately reflects the restless mind-set of the customers and prospects who are constantly exposed to new ideas and different ways of doing things largely as a result of social media.
It also flags up two important points.
The first is that we have to work harder and work in different ways and through different channels to maintain customer retention and loyalty because it is constantly being eroded by competitor activity. Relationships matter more than ever, so if you haven’t looked what you are doing to recognise and reward your customers and channel partners who sell for you, then you are missing a trick. Loyalty programmes nurture customer relationships.
The second is the huge opportunity of customer acquisition. Loyal customers who are constantly engaging with peers are your best advocates. The challenge for marketing is to come up with ways of incentivising and rewarding business referrals, lead generationand other activity which supports customer acquisition.
Although the marketing textbooks may need to change, the rules of winning and retaining customers remain the same: stand out from the crowd for what you do and when you win your customers, make sure you look after them. Sounds simple doesn’t it?
Colin Hodgson is sales director for incentives and motivation at Edenred