Lifecycle Marketing

LIFECYCLE
MARKETING
PRODUCING GREATER CUSTOMER ENGAGEMENT,
BETTER RETENTION, AND INCREASED REVENUE
Lifecycle Marketing Report - August 2016 2
Table of Contents
3 Introduction
5 Ownership & Understanding
7 Customer Lifecycle Marketing Benefits & Challenges
9 Lifecycle Marketing Critical Success Factors
11 The Revenue Impact of Customer Lifecycle Marketing
12 Lifecycle Marketing Action Plan
13 Acknowledgements
© 2016 Demand Metric Research Corporation. All Rights Reserved.

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INTRODUCTION
It’s well known among marketing professionals that customers go through a series of
stages – a lifecycle – in their relationship with vendors. Despite differences in
customers and the vendors with whom they do business, the lifecycle stages are
pretty universal: Awareness (also known as Attraction), Consideration, Purchase,
Retention and Advocacy. What differs is how long prospects remain in each stage,
what kind of experience they have while they’re there, and what must happen to
advance the relationship to the next stage.
Marketing is ideally the steward of the customer journey, and it faces several
challenges in fulfilling this responsibility. One of the most formidable challenges is the
self-directed nature of the journey. The norm is for prospective customers to start
their journey in stealth mode, making significant progress on their own without
marketing and sales aid, influence or assistance. Marketing has historically presided
over the Awareness stage, and together with sales, the Consideration stage. But now,
customers often pass through both of these stages undetected, and marketers
understandably feel some anxiety over their diminished influence in these lifecycle
stages.
While the stages of the customer journey are well known, from the customers’
perspective traversing them is sometimes a bumpy ride. Customers don’t view their
relationship with vendors as a series of stages, each with a different conductor who
may or may not know what transpired in a previous stage. Customers want a smooth
journey and expect vendors to know the history of their relationships and the content
already consumed; they don’t want to have to re-explain their needs and interests
each time they transition to a new stage. They prefer seamless, consistent quality
across all touch points and stages of the relationship,
regardless of the device or channels through which interaction occurs. They value
one-to-one, contextually relevant engagement that is sensitive to who they are, what
they do and where they’re going.

INTRODUCTION
This description of seamless, consistent engagement across the full customer lifecycle
is not the norm. Demand Metric research on customer lifecycle marketing has shown
that less than 20 percent of organizations are currently marketing to their customers
1
across the entire lifecycle of the relationship. Figure 1 shares the current state of
customer lifecycle marketing from a recent Demand Metric study on the subject.
Approaches to Customer Lifecycle Marketing
Marketing in all stages of the lifecycle 19%
Marketing in some stages; plans for all 22%
Marketing in some stages; no plans for all 9%
Considering adopting it 23%
Familiar but not doing 15%
Not familiar with it 12%
Figure 1: Less than 20 percent of companies studied are marketing

across all stages of the customer lifecycle.
Rather than experience a seamless path through every stage of their journey, the
current situation is that customers often encounter some turbulence, unintentionally,
but turbulence nonetheless. This guide will help you guide your customers to the
smooth air during their journeys. It explores the issues of ownership, benefits,
challenges, impact and critical success factors of customer lifecycle marketing.
1 “Customer Lifecycle Marketing”, Demand Metric Benchmark Study, November 2015

OWNERSHIP & UNDERSTANDING
The concept of marketing to customers across the span of their relationship is

intellectually appealing and simple to grasp. The benefits of doing so seem obvious: a
better relationship. The quality and depth of the relationship is the catalyst for
engagement, trust, influence, loyalty and ultimately revenue. Almost every marketing
and sales professional intuitively understands these links, and having their influence
crescendo across each relationship stage has a financial impact. When vendor
companies fail to market across the customer lifecycle, the reason isn’t because they
don’t want to or don’t see the value. It’s because their understanding of the customer
lifecycle is incomplete, they don’t have clear ownership defined for each stage of the
journey, or both.
Marketing across the entire customer lifecycle requires more than understanding what
the stages of the lifecycle are – marketing and sales teams know these stages well.
Instead, one-third of organizations report difficulty determining which stage their
customers are in, and over half report difficulty understanding their customers’
2
content needs as they move through the stages . For some organizations, they simply
don’t have the data to know these things. Other organizations have the data, but they
aren’t using it. The key to knowing the customer lifecycle vital signs is a mature
implementation of a marketing automation solution, one that is integrated with CRM
and other systems that provide data. With such an implementation in place, the key
unknowns about where customers are in the lifecycle, what content they’re consuming
and what they need are visible.
Understanding is one side of the customer lifecycle marketing coin. The other side is
ownership. Historically, marketing has tended to stick to its Awareness knitting, quite
often presiding over a finely-tuned process of attracting leads into the top of the
funnel, nurturing them and qualifying them before passing them off to the sales team
at some point during the Consideration stage. When the sales team assumes
ownership of the relationship, it remains firmly in control through the Purchase stage.
Once a prospect makes a purchase decision and becomes a customer, the perceived
need to market further to that customer often evaporates. These customers transition
to the last two relationship stages – Retention and Advocacy – with the marketing and
sales teams believing their work is done.
2 Ibid.

OWNERSHIP & UNDERSTANDING
Customers that enter the Retention stage of their relationship with a vendor may feel
like orphans. The early stages of their vendor relationships resemble courting, with
lots of attention coming their way during the Awareness, Consideration and Purchase
stages. That “high-touch” philosophy doesn’t always carry over into the Retention
stage, or the Advocacy stage if a customer reaches it. A big reason why is the
fragmented and inconsistent ownership of these latter stages. The most likely
function within a vendor to own the Retention stage is support, in 29 percent of
cases; its sales or marketing in 26 percent of cases respectively, and in 10 percent of
3
companies studied, no one owns this stage .
The support function is a very capable owner of the Retention stage, because it is
often a “high-touch” function too. Its culture, however, is more likely response-driven,
compared to the gregarious nature of marketing and sales. Customers can get help
and attention if they ask for it. The vendor assumption is that if customers aren’t
demanding attention, then things in the relationship are fine. Many vendors are
missing a significant opportunity for growing customer profitability in the Retention
and Advocacy stages, where customers get supported, but not marketed to. Yet, 85
percent of companies acknowledge that marketing to customers is an important
4
strategy for achieving revenue goals .
What needs to occur is the adoption of a holistic view of the customer lifecycle and
the engagement philosophy that supports it end-to-end. A single, shared view of
marketing to customers must infuse each stage of the lifecycle. It isn’t necessary or
even wise for a single function, for example marketing, to own AND execute each
stage. But it is necessary for a single function to own the vision for marketing across
the lifecycle, and ensuring that transitions between stages are seamless, touch points
are consistent, and that what is happening across the lifecycle is tracked and
measured.
3 Ibid
4
“Customer Marketing Benchmark Report”, Demand Metric, October 2014

CUSTOMER LIFECYCLE MARKETING BENEFITS & CHALLENGES
The top benefit of effectively marketing across the customer lifecycle is greater
5
customer engagement . This is a case where the benefit and the strategy for
attaining it are one and the same, as lifecycle marketing is engagement marketing.
The goal is to create persistent, meaningful interactions based on customer behaviors
through every lifecycle stage. This type of marketing requires engaging customers as
individuals everywhere they are, based on what they do, continuously over time, and
directed toward an outcome. This marketing approach is described in detail in the
Ebook, “The 5 Principles of Engagement Marketing” from Marketo.
The far-reaching benefit of greater customer engagement cascades into many areas
of an organization. When customer engagement is strong:
ü  Senior management sees increased revenue, profitability and gains a more
holistic understanding of the customer.
ü  Customer success teams see increased customer satisfaction indices and Net
Promoter Scores.
ü  Marketing sees greater market share, increased brand equity and higher
campaign ROI.
ü  Sales teams see higher quota attainment, lower cost per acquisition and
more qualified opportunities.
ü  Support sees lower average resolution times and fewer incident escalations.

CUSTOMER LIFECYCLE MARKETING BENEFITS & CHALLENGES
The impact of having better engagement with customers is felt in the Retention stage.
That firms benefit from retaining their customers as long as possible is intuitive.
However, the financial impact of customer retention beyond the average relationship
duration is often not fully understood. Arthur Middleton Hughes of the Database
Marketing Institute has studied the relationship of retention on profit. Hughes
estimates that improving retention rates by 5 percent produces a profit impact
6
between that ranges from 17 to 23 percent . Improved retention impacts profits and
in turn increases Customer Lifetime Value: these benefits are the fruit of greater
customer engagement.
Standing in the way of these coveted benefits are some challenges, and three of them
are experienced by half of organizations that are trying to market through the full
7
customer lifecycle :
1.  Understanding the customers’ content needs across each lifecycle stage
3.  Identifying and tracking good metrics for each lifecycle stage
5.  Having systems that can capture data from touch points in each lifecycle stage
These challenges are highly interrelated: without the proper systems, it’s impossible
to collect data about customer content consumption. Without proper data, metrics
are meaningless, and without data and metrics, understanding customers’ content
needs as they move through the lifecycle is just guesswork, refined by trial-and-error
content deployment.
These challenges may seem formidable, but there is a clear path through them, as
discussed in the next section of this guide.
6 “The Loyalty Effect: A New Look at Lifetime Value”, Arthur Middleton Hughes, www.dbmarketing.com/articles/Art154.htm

LIFECYCLE MARKETING CRITICAL SUCCESS FACTORS
Having success marketing across the entire customer lifecycle isn’t difficult. It simply
requires understanding the critical success factors and having the discipline to ensure
8
they are in place. Fortunately, research provides us with the top ten list of success
factors, and in priority order:
1.  Clearly defined goals. Any endeavor, and customer lifecycle marketing is no
exception, should have a set of goals to propel it forward. Where lifecycle
marketing is concerned, establish goals for each lifecycle stage.
2.  Reliable data and actionable analytics. Goals need metrics to measure
progress. Determine which measurements are the best indicators of how
customers are consuming content and progressing through each lifecycle stage.
Collect the data needed to support these measurements, analyze the results and
use them to make process changes or improvements.
3.  Detailed segmentation capabilities. Acquire the tools and expertise to

segment customers so that you can develop personas for all or at least the most
important segments. Consider segmenting on demographics, behaviors, interests,
and levels of engagement. For each lifecycle stage, research the segments to
understand customer information needs and preferences for getting it.
4.  Alignment of functions. Because different functions (e.g. marketing, sales and
support) “own” different stages of the lifecycle, make sure alignment exists
between functions. Different owning functions should share data so that a single,
comprehensive view of the customer is available to everyone. Clearly define when
transitions between stages occur, and the criteria that trigger the transitions.
5.  Personalization capabilities. Don’t provide the same content for every
customer and prospect. Instead, use your segment detail and personas to
customize the content you provide. When combined with analytics data, you can
9
personalize content to give customers a nudge or a push on their journey, as
needed.
8 Ibid.
9 A “nudge” is for driving engagement; a “push” is for driving conversion. Learn more about engagement tactics in
“Customer Activation: Marketing with a Measurable Purpose”

LIFECYCLE MARKETING CRITICAL SUCCESS FACTORS
6.  Greater accountability. With good alignment of the functions that own stages of
the customer lifecycle should come accountability for outcomes. Create
accountability for achieving the goals in each stage, particularly in the latter stages
of Retention and Advocacy, which tend to suffer the most neglect.
7.  High touch engagement. High touch engagement is usually a hallmark of the
early lifecycle stages: Awareness, Consideration and Purchase. Maintain a
consistent level of high touch engagement in the latter stages of the lifecycle too –
Retention and Advocacy – where it pays big dividends.
8.  Effective testing. Ruthlessly test key messages and the content built upon them,
discarding or modifying low-performing content and messages with ones that
work. Have testing become a routine part of your lifecycle marketing process, not
just something that happens once in a while.
9.  More robust systems. Put the systems in place to capture the data for tracking
your metrics. Marketing automation systems enable the data collection for most
or all the metrics you need to track. Many users of marketing automation need
simply to become more mature in their use of systems they already have.
10.  Ownership of the entire lifecycle. This ownership is primarily for

accountability purposes; it does not mean that a single function must execute all
tasks for all stages. A single function within the company – marketing or even the
C-suite – needs to own the lifecycle marketing process to ensure proper goals
exist, measurements are tracked and used, the experience and engagement is
consistent across all stages, transitions are smooth and functions are aligned.
Companies that are already marketing across the customer lifecycle can use these
success factors to audit their efforts and identify any gaps in their current process.
Companies that wish to begin marketing across the lifecycle can use these top ten
success factors to build an effective process from the start.

THE REVENUE IMPACT OF CUSTOMER LIFECYCLE MARKETING
While only about one in five marketing organizations are currently marketing across
all lifecycle stages, those that are realize more revenue. Compared to traditional
10
marketing approaches, almost three-fourths of companies surveyed report
experiencing a revenue lift as a result of marketing across all customer lifecycle
stages.
Firms that don’t market across all the lifecycle stages are essentially failing to reach
the finish line in a high-stakes race. Ceasing to market to customers after they
purchase leaves them adrift in the last two stages of Retention and Advocacy. This
doesn’t mean that no one is tending to customers in these latter stages, but it often
means customers are no longer marketed to. It is in these latter stages that
customers are the most receptive to marketing efforts, and when they can purchase
again or refer new customers. Accelerate these outcomes by marketing to customers
in these final lifecycle stages.
Why isn’t everyone who practices customer lifecycle marketing getting a revenue
benefit? Those organizations that have not defined goals, metrics, accountability and
ownership will not see a measurable benefit from attempts to market across the
lifecycle stages, even if they claim to do so. The success factors described in the
previous section are foundational to effectiveness, and organizations that pursue a
lifecycle marketing strategy must be intentional about it.
The revenue impact of customer lifecycle marketing is compelling, and for those who
need further evidence of the strategy’s effectiveness, consider the future investment
plans for customer lifecycle marketing by those who practice it: over three-fourths
11
have plans to grow their commitment and investment in it. Customer lifecycle
marketing is receiving a convincing vote-of-confidence from its adherents.

11 Ibid.

LIFECYCLE MARKETING ACTION PLAN
Research makes a strong case for lifecycle marketing, and marketers’ also know
intuitively that it makes great sense. The 10 success factors shared previously
provide the blueprint to implementing a customer lifecycle marketing strategy. The
action plan that follows distills those 10 success factors into three steps:
ü  Vision and executive ownership. Encompassing success factors 1, 4, 6 and 10,
customer lifecycle marketing is most effective when inspired by a vision and with
the right cultural underpinnings. Ideally, the C-suite casts the vision, sets the
goals, creates the accountability and champions the importance of alignment.
When the C-suite provides this level of customer marketing leadership, the results
are better than expected.
ü  Stage understanding and responsibility. Encompassing success factors 2, 3, 5

and 8, organizations must understand the details of the customers’ journey through
each stage. This occurs by measuring and analyzing how customers proceed
through the stages, understanding what content is most valuable and how to
personalize the delivery of that content. Cap off this understanding by spelling out
who is responsible for each stage’s effectiveness, and ensuring that all stage
owners share the same, holistic view of the lifecycle.
ü  Investment. Investing adequately the technology to enable customer lifecycle

marketing, of which marketing automation is the backbone. Furthermore, ensure
that marketing activities for all stages are adequately funded. The research shows
that three of the five stages – Awareness, Consideration and Purchase – are usually
well funded, but Retention and Advocacy suffer.
Marketing to customers across their entire lifecycle will produce greater customer
engagement, and from that better retention, more advocacy, and the revenue that
results from doing so.

ACKNOWLEDGEMENTS
Demand Metric is grateful to Marketo for sponsoring this report.
About Marketo
Marketo (NASDAQ: MKTO) provides the leading engagement marketing software and
solutions designed to help marketers develop long-term relationships with their
customers - from acquisition to advocacy. Marketo is built for marketers, by marketers
and is setting the innovation agenda for marketing technology. Marketo puts
Marketing First. Headquartered in San Mateo, CA, with offices around the world,
Marketo serves as a strategic partner to large enterprise and fast-growing small
companies across a wide variety of industries. To learn more about Marketo’s
Engagement Marketing Platform, LaunchPoint® partner ecosystem, and the vast
community that is the Marketo Marketing Nation®, visit www.marketo.com.
About Demand Metric
Demand Metric is a marketing research and advisory firm serving a membership

community of over 80,000 marketing professionals and consultants in 75 countries.
Offering consulting methodologies, advisory services, and 500+ premium marketing

tools and templates, Demand Metric resources and expertise help the marketing
community plan more efficiently and effectively, answer the difficult questions about
their work with authority and conviction and complete marketing projects more
quickly and with greater confidence, boosting the respect of the marketing team and
making it easier to justify resources the team needs to succeed.
To learn more about Demand Metric, please visit: www.demandmetric.com.


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LIFECYCLE

5 Ownership & Understanding

7 Customer Lifecycle Marketing Benefits & Challenges

9 Lifecycle Marketing Critical Success Factors

11 The Revenue Impact of Customer Lifecycle Marketing

12 Lifecycle Marketing Action Plan

© 2016 Demand Metric Research Corporation. All Rights Reserved.

© 2016 Demand Metric Research Corporation. All Rights Reserved.

Approaches to Customer Lifecycle Marketing

Marketing in all stages of the lifecycle 19%

Marketing in some stages; plans for all 22%

Marketing in some stages; no plans for all 9%

Considering adopting it 23%

Familiar but not doing 15%

Not familiar with it 12%

Figure 1: Less than 20 percent of companies studied are marketing

1 “Customer Lifecycle Marketing”, Demand Metric Benchmark Study, November 2015

© 2016 Demand Metric Research Corporation. All Rights Reserved.

OWNERSHIP & UNDERSTANDING

The concept of marketing to customers across the span of their relationship is

© 2016 Demand Metric Research Corporation. All Rights Reserved.

OWNERSHIP & UNDERSTANDING

© 2016 Demand Metric Research Corporation. All Rights Reserved.

CUSTOMER LIFECYCLE MARKETING BENEFITS & CHALLENGES

5 “Customer Lifecycle Marketing”, Demand Metric Benchmark Study, November 2015

© 2016 Demand Metric Research Corporation. All Rights Reserved.

CUSTOMER LIFECYCLE MARKETING BENEFITS & CHALLENGES

7 “Customer Lifecycle Marketing”, Demand Metric Benchmark Study, November 2015

© 2016 Demand Metric Research Corporation. All Rights Reserved.