Across retail, the majority of customers are one-time only purchasers from a particular brand, regardless of the vertical. For some brands, up to 80% of customers are one-time buyers, meaning they purchase once from the brand and then never return again.
I, too, am guilty of being a “one and done” customer. I enjoy a good deal, and as a result, I have fallen victim to impulse buys. Just this past spring break, I purchased TUMI luggage on sale, knowing that my family would be soon leaving the chill of the Northeast.
Let’s examine this purchase further. For me, I have never purchased TUMI luggage before. I was well aware of the brand, it’s reputation for quality but previously I did not have a reason to make a purchase.
In the aforementioned scenario, my purchase was stimulated by a promotion. However, there are a number of factors that can influence a purchase: product need (i.e., first-time purchase, replacement, upgrade, etc.), product benefits, cost savings, or some combination of all three.
Following my purchase, in the eyes of the TUMI marketer or sales professional, I moved from a prospect to an engaged customer but what if on my next purchase, I decide to purchase from Samsonite? Why would I move from TUMI to Samsonite? Where does the disconnect between the brand and the consumer arise?
Despite what we are led to believe, it’s not always client dissatisfaction that drives a customer from one brand its competitor. It can be the same triggers that helped them make a purchase in the first place. In these situations, it is the fault of the brand, for failing to give customers a reason to reengage with the brand.
Enter lifecycle marketing. Lifecycle marketing is the process by which brands can stay engaged with customers post-purchase, as they move along their lifecycle eventually heading towards their next purchase. Successful lifecycle marketing provides customers with the content they desire, through the appropriate marketing channels at the time desired by the customer. It is taking the concept of “right time, right place, right offer” and putting it into practice.
Let’s look at my recent e-commerce purchase with TUMI to see how lifecycle marketing program could come to fruition. For starters, since I have purchased online, I have given TUMI my email address, and in an ideal world, I should receive a “thank you” email from the brand. Over the next 30 days, I should be entered into a welcome email series that is a coordinated and shares relevant information with me based on my purchase.
Moreover, as I continue to engage with TUMI whether it’s on their website, clicking through to certain products, or spending time opening and reading emails from TUMI, the brand should be capturing this behavioral data that I am exhibiting and incorporating it into their lifecycle marketing program.
Note that during this initial introduction to the brand, TUMI is not bombarding me with messages telling me to make another purchase. Rather, they are providing me with content that is relevant to my interests so that when the time is right, and I move along the lifecycle, TUMI will be top of mind when I make my next purchase.
As prescribed through the fictitious example with TUMI, lifecycle marketing is an approach that reshapes the marketing funnel and places the customer at the center of its engagement cycle.
Lifecycle marking is not engagement, for engagement’s sake, either. By sustaining engagement with customers throughout their lifecycle this will help to drive future transactions. For brands, not only is incremental revenue realized when one-time purchasers make a second purchase, but it is 6 to 7x more expensive to acquire a new customer than it is to keep an existing one, thereby increasing future lifetime value of customers while decreasing cost of acquisition.
As retailers operate in highly competitive and saturated markets, lifecycle marketing tactics enable them to focus on growing the lifetime value of their existing customer base while decreasing acquisition costs.