Customer Lifecycle Methodology in Business Analytics

> CUSTOMER LIFECYCLE <
Customer Life Cycle Methodology in Business
Analytics
I. EXECUTIVE SUMMARY
This report provides an analysis of customer
lifecycle methodology in business analytics. In the
report, the concepts of customer life cycle and
business analytics will be explained. The report will
give a detailed customer life cycle methodology and
stages to help business managers understand how to
integrate the two for the benefit of the company at
large.
Table of Contents
Executive Summary........................................................2
Introduction....................................................................4
Overview of Customer Lifecycle and Business Analytics 4
Customer Lifecycle Methodology...................................5
Awareness..................................................................5
Conversion..................................................................5
Purchase.....................................................................6
Activation...................................................................6
Renewal......................................................................6
Referral.......................................................................7
Implementing Advanced Business Analytics in Customer
Lifecycle..........................................................................7
Non-technical Challenges...........................................7
Customer Profiling- Segmentation.............................8
Application of Business Analytics to Customer Life Cycle
........................................................................................8
Acquisition..................................................................9
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Up-sell........................................................................9
Service........................................................................9
Retention....................................................................9
Conclusion....................................................................10
References....................................................................11
II.INTRODUCTION
The topic of customer lifecycle methodology in
business analytics has attracted endless debates by
most researchers. Customer lifecycle methodology
goes hand in hand with business analytics, and
companies have been integrating the two to increase
the quality of performance and service delivery to
the target markets. According to Margaret [1],
business is built around the target market or in other
words the customers. Every company requires
customers in order to survive or sell its products
and services to. Needless to note, the success of an
organization is directly dependent on its ability to
attract and gain customers, nurture them, please
them, resolve their demand problems, and
consequently make profits out of their sales.
However, this cannot happen before a business
identifies the right and most potential customers. In
this report, customer life cycle methodology in
business analytics will be explained in detail.
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III. OVERVIEW OF CUSTOMER LIFECYCLE AND BUSINESS
ANALYTICS
Customer lifecycle refers to the steps followed by
customers in considering, purchasing, usage, and
maintenance of loyalty to a company’s product or
service. On the other hand, business analytics
entails the skills, practices, and technologies for
continuous iterative investigation and exploration of
past business performance in order to acquire
insight and drive business planning to ensure future
growth, sustainability, and success. As per Sophia
[2], nearly all industries such as retail, transport,
telecom, banking, insurance, and hospitality players
have embraced business analytics to help in
gathering market information about the target
customers and the nature of competition within
their respective industries. Companies like Amazon,
Apple, Samsung, Toyota, Reebok, Walmart, and
Coca-Cola have been in the forefront when it comes
to the use of business analytics to understanding
customer demands, purchase patterns, and
responses to new products in comparison to their
competitors.
IV. CUSTOMER LIFECYCLE METHODOLOGY
According to Ryan [3], the methodology of
customer lifecycle is explained in its six main
stages which are categorized into 3 mainly the;
acquire, engage, and retain methodology. The six
stages fall under the processes of awareness,
conversion, purchase, activation, renewal, and
referral.
Figure 1.0: Stages of Customer Lifecycle
Methodology
A. Awareness
In the first stage of customer lifecycle, the
customers of a company realize to be having a
problem that need to be resolved [4, p. 8]. Hence,
the customers become aware of the solutions that
the brands of a company are able to provide by
conducting online research and also generating their
free resources such as blog posts, social media
platforms, or even YouTube videos.
B. Conversion
At the stage of conversion, the customers of a
business are aware about the solutions that the
company can offer and have signed up for free
resources in a quest to learn more, for instance an
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eBook, a free trial, a webinar, or a free version of a
company’s product. At this stage, it is advisable that
a company promptly demonstrates value by
assisting all customers accomplish key milestones
with the product being offered. Hofmann et al., [5]
argues that helpful onboarding methodology and
educational resources should be provided to make it
easy for customers to adopt the product.
C. Purchase
In stage three, the sales team of a business have
already done their work, and successfully closed
deals with new paying customers. Here, the
company should continue to prove and demonstrate
its products’ value by offering dedicated
onboarding, providing proactive customer success
management, and by asking for customer feedback.
D. Activation
The main goal of activation is not getting customers
buy a product but motivating them to become daily,
weekly, or constant users of the product. Since most
SaaS products get sold on basis of monthly
subscription, this makes it easy for the consumers to
cancel and move to a competitor business at any
time they become unhappy. In this stage, business
analytics of a company needs to ensure that they
offer outreach, education, and sufficient resources
to hinder roadblocks that drive customers to churn
and this is justified by Kohlborn [6, p. 4].
E. Renewal
According to Holsapple [7], customers are expected
to renew services of a company if they have been
satisfied in the past year of a couple of months by
its products offers. Prior to this, it is vital for a
business to maintain constant communication with
its customers to ensure that the business
understands any reasons why customers will not
renew or to know any sources of possible
objections. The business analytics needs to ensure
that the company customers are familiar with the
advantages of being members of the company’s
loyalty program.
F. Referral
The last stage is referral. At this point, the business
customers have not only renewed their subscription
and joined the customer loyalty program but also
are happy to an extent of informing their colleagues
of the company’s quality and best offers. Michalis
[8] states that the methodology used in referrals
includes word-of-mouth marketing, testimonials
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