All good things must end. At some point in time, a customer’s life cycle will be complete. I call this final stage R.I.P. as in “rest in peace.” When customers stop buying, it’s time to stop investing your retention marketing dollars. They have completed their life cycle. For the time being…
In some cases, they will never order again. They have died (literally), changed their lifestyle, or been completely alienated from your company. These people are gone. You have to determine the factors that identify them as R.I.P.’s. If you have a reactivation program, the factor may be after X attempts to get them to order again. If you don’t, then you need to get one.
There are other signs that customers have ended their life cycle.
When the next-of-kin send a deceased notification, you know that person won’t order again unless you have a special arrangement with the afterlife. I’m being a bit silly here, but this is quite serious. Housekeeping is a huge issue in most of the customer databases we see. The deceased notification goes to the customer service department. If there is not a specific process for handling it, the clerk reads the note, thinks “that’s sad,” may or may not update the customer record, and disposes of it.
Most order management systems have a series of “Do Not Mail” flags. They include things like “Deceased”, “Undeliverable”, and “Customer’s request.” Some even allow you to define your own category. One would think that updating those records eliminates the housekeeping issue. It won’t if marketing doesn’t use the information. The expansion of the flag from a simple “Do not mail” to include reasons requires a change in the data export to capture the information. If that hasn’t occurred, people who have requested removal are receiving every direct mail piece and wasting thousands of marketing dollars.
While some people are R.I.P., others are simply resting.
They are between life cycles. You can resuscitate them. Do you remember the Falling Stars example of children’s clothing? The same person who completed the natural lifespan through size 14 may have another child, a niece or nephew, or a grandchild. When this happens, the life cycle starts again. If your customers leave because of a lifestyle shift, there is always the possibility that they will find their way back to you again. Be ready with a strategy to encourage them to do so.
It is important to recognize people in every stage and use targeted and timely marketing materials. While it is impossible to identify every stage for each person, the closer you come, the better. It increases your revenue and lowers marketing costs to generate higher profitability. Every time.
How much money did you waste last year? What are you going to do about it?
If you like this post, please share it with your community. You may also like these:
- Customer Life Cycle Part 3: How to Keep Newbie Customers from Eating Your Profits
- Customer Life Cycle Part 1: Your Customers are Changing – Does Your Marketing Still Fit?
- Customer Life Cycle Part 5: Getting Value Out of Discount Customers
- Customer Life Cycle Part 4: How to Identify Hit & Run Customers Before They Kill Your Business
- Customer Life Cycle Part 9 How Do You Catch a Falling Star?
Ask Debra!
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