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What is the ecommerce customer lifecycle? The 5 stages you need to know

Think about the brands you've interacted with recently. You may have browsed some tech sites for new headphones, requested fabric samples for a new sofa, and placed another order for your favourite coffee beans.

With each of these brands, you're at a different stage in the ecommerce customer lifecycle. 

Your ecommerce business also has many customers and prospects at different stages of the customer lifecycle. Some will have just become aware of your brand, others will be comparing your products with other brands, and you'll also have repeat customers who are loyal to your brand and actively recommend you to their friends and family.

Each of these audiences requires a different approach from you. You must win over new customers, nurture others towards the checkout, and keep loyal customers happy.

By understanding the customer lifecycle and the different lifecycle stages, you can start to adapt your ecommerce marketing strategy to drive big results for your small business.

Let's dive in.

What is the customer lifecycle?

The customer lifecycle outlines the steps a customer takes with your brand, from becoming aware of a brand to making a purchase and, ideally, becoming a loyal customer.

It's your job to bring people from one stage to the next through various marketing efforts. That's where lifecycle marketing comes in. Lifecycle marketing means tailoring your strategy, messages and channels according to which stage the customer is at with your business.

Customer lifecycle marketing doesn't rely on only one marketing tactic to reach your audience; it can use many tactics, including content marketing, search engine optimisation (SEO), paid ads, email marketing, SMS campaigns, and more.

The bottom line?

To grow your ecommerce business, especially as a small business, you need to understand your customers and their journey to buy your products. 

What are the customer lifecycle stages?

There are five stages of the ecommerce customer lifecycle. The important thing to note is that the customer lifecycle includes two stages after purchase: loyalty (customers making repeat purchases) and advocacy (customers who recommend your ecommerce store to others).

Let's look at the typical ecommerce customer lifecycle:

Stage 1: Awareness / Reach

This stage is the very first interaction a potential customer has with your online store. It might be when they see your social media post, click on your website on the search engine results page or see a display ad on another site.

In this stage, the customer already has a problem they want to solve, and it's your chance to reach the customer while they're looking for a product to solve it.

Social media is a great place to start. For example, studies show 50% of users go to Instagram to discover new brands, products or services. Content marketing, SEO, search ads, and influencer marketing are other top tactics to reach customers at this stage.

This is also the stage when they may visit your website and subscribe to your email updates. You can use email marketing to recommend products they have taken an interest in, offer a first-purchase discount, and other offers to encourage them to choose your online store over the competition.

Pro Tip: Check email addresses are valid as they are typed in your online forms. Loqate's verification solution can be easily integrated with your ecommerce platform to make sure data is correct before it enters your retail systems, so you are using marketing efforts effectively from day one.

Stage 2: Consideration

Now your prospect is comparing products to find the right one to purchase. They are in the consideration stage, and your goal is to win them over to your small business.

The online customer will be comparing products from your competitors, reading reviews, talking to friends, and doing searches.

Your aim is to give them enough information about your brand and products that they choose your ecommerce business. Create educational content that will help them make a purchasing decision. Every blog post, how-to guide, FAQ, pricing page, or sizing chart should give the customer what they need to decide.

Stage 3: Acquire/Convert

In this customer lifecycle stage, the customer has considered their choices and it's time for you to win the final conversion. This is when they enter the conversion (aka acquisition) stage of the retail customer lifecycle.

For ecommerce businesses, product pages and checkout forms are crucial for converting browsers to customers. The smallest changes on these pages are proven to impact your conversion rate significantly.

For example:

  • Make contact forms short and easy to fill out
  • Automate shipping costs and promotion codes so customers don't have to worry about filling out more forms and adding codes
  • Don't force customers to create an account – offer a guest checkout so they can speed through and pay
  • Offer live chat to answer urgent questions.

Ecommerce businesses lose an estimated $4.6 trillion each year due to cart abandonment, because over three-quarters of shoppers leave items in their cart without purchasing. But you already have the shopper's email address from stage one or two, so you can use cart abandonment email sequences to remind the customer there are still items waiting for them. Cart abandonment email sequences are one of the most effective ways to bring visitors back to complete their purchase – 46.1% of people open cart abandonment emails.

Another way to give your prospects a final push to your online store is with retargeting ads. Using cookie data, you can retarget recent store visitors with ads to remind them about products they wanted to buy.

Stage 4: Nurture

This stage is about nurturing your new customer and maximising their value to your business. Again, it comes down to creating the best possible customer experience so they build a connection with your brand. If you can "wow" new customers early in the relationship, they're more likely to turn into repeat purchasers and brand loyalists – which is critical to any small business.

Once that first purchase is made, you must stay in contact with customers and develop the relationship. Send them an email asking for feedback, use analytics to find what else they might like based on their first purchase, and make them feel special with personalised offers.

Email marketing is a crucial channel for this stage because it allows you to continually send relevant and meaningful messaging to customers and regain their attention.

You can go a step further by encouraging them to enrol in a loyalty program or community to help them build a genuine emotional connection with your brand.

Stage 5: Advocacy

The ultimate stage of the retail customer lifecycle is when your customers become your marketers and salespeople. By now, they are so connected to your brand that they actively promote your brand to friends, family and social networks.

Encourage this behaviour using referral incentives via email and social media. But even with incentives, for customers to reach this stage, you must deliver a great customer experience and products. They won't hesitate to recommend your store to friends and family if they are truly satisfied. And the more they spread recommendations, the more their extended network is likely to convert.

Conclusion

The cost of acquiring new customers is rising, so online retailers need to maximise the value of their current customer base wherever possible. That's where the customer lifecycle comes in. If you understand where your customers stand in the customer lifecycle, you can move away from a one-size-fits-all approach to tailor your marketing and increase their value to your ecommerce business.

Find out more about how Loqate’s solutions can help your ecommerce business get the most value from customer lifecycle marketing. Speak to one of our product experts today.