In this article you will learn how to apply Growth Hacking to Customer Lifecycle Marketing. After reading the following passages you will know which metrics are the most important for each customer lifecycle phase and what experiences you should create to develop your customer.
The customer lifecycle usually starts with a lead generation campaign. The lead then enters a Lead Nurturing journey with the goal to convert the lead to a subscriber or a trial user. When a user starts using your product you need to onboard this customer. When the user has finished the onboarding and the trial period you want to retain the customer as long as possible and develop the customer further by cross- and upselling. When the customer churns, the last phase of the customer lifecycle is entered, the winback phase.
In each phase of the Customer Lifecycle, Marketing has different goals and needs different experiences and communications to accomplish these goals.
Lead Nurturing and Conversion
When a customer has just signed up the engagement is the highest. You should try to send an offer for a trial or a subscription right away.
If that doesn’t work you need to explain your product better, show use cases, social proof through testimonials and then try again.
If this still doesn’t work you need to show the value of your product from various angles and explain different aspects of your product and how this helped customers in their life or work.
Growth Metric – Lead Conversion Rate: This is your most important metric in this phase. Don’t let yourself get distracted by vanity metrics like open rates, click rates, landing page visits or the absolute number of conversions. You need to increase the relative amount of leads that convert to a subscriber or trial user, which is measured by the Lead Conversion Rate.
Onboarding
As new customers don’t know your product, it is essential to lead them to the aha moment as fast as possible. The aha moment is the moment, when a potential customer, trial user or already subscribed customer, experiences the value of your product.
To guide the user to this moment is the true essence of an onboarding journey. It doesn’t matter if the customer is a trial user who is actively testing your product or already a customer. If your users don’t experience the value that your product creates, they won’t become your customer or won’t stay for long.
The value your product creates might be obvious to you, but not to a person who has never used your product before.
Find the aha moment. You will clearly see it in your data. After experiencing the aha moment the conversion rates of trial users is way higher than before. For users who directly become your customers without a trial, the retention rate will be much higher after experiencing the aha moment compared to users who didn’t have that experience.
When you have found the aha moment, make sure each new user experiences this moment as fast as possible.
Growth Metric – Conversion Rate, Retention Rate: For trial users your North Star Metric will be the conversion rate into full subscribers. For customers, who subscribed without a trial phase, your North Star Metric is the retention rate.
Retention
When you have onboarded your customer you should educate your customer on how to get the most value from your product. This means explaining all the features, showing how other users use the product and offering support with whatever issue a customer might face.
You want to delight your customer. Interview customers who are the most active users of your product to understand how they use it. These are the people who experience the most value and this group is least likely to churn.
When you know how these most active users are using the product, you can try to nudge the less active users into the behaviour patterns of active users, so they can experience the same value from your product.
Growth Metric – Retention Rate: Create a cohort analysis to measure retention. Each cohort should include users who subscribed within the same time frame (e.g. one cohort per month).
The customers you have are the most valuable for you as they already trust your brand and your product. This is the group that will show the highest conversion rates for offers. If you have interesting cross- and upselling products you should offer these to your customers. If your customer likes another product from you, the probability of churn is decreasing, as the customer is experiencing more value from your offering now.
Growth Metric – Cross- & Upselling Conversion Rate: Again, stay focused on the essentials! Your North Star Metric for Cross- & Upselling journeys is the Conversion Rate. Open Rates, Views, Click Rates and absolute numbers don’t matter much for the continuous improvement of your journeys.
Churn Prevention
It is really hard to predict who will churn in the near future (for humans). That’s why you will need a machine learning algorithm to process your data and find the patterns to proactively address churners before they churn.
But what you can do now is to create mechanisms to address the moment users are cancelling their subscription. When they visit the page to cancel their subscription or contact your customer service you have the chance to make them think again.
Furthermore you can regularly do a NPS survey with your customers. This will give you information on how satisfied your customers are. Users with a score below 5 should be proactively addressed by a customer experience to increase the perceived value of your product.
Growth Metric – Churn Rate: The metric to focus on is the Churn Rate. The Churn Rate is directly related to your Retention Rate (Churn Rate = 1 – Retention Rate).
Winback
Your past customers are a very valuable group for your company. These people have already trusted your company before and they know your service so you don’t need to educate them as much as new customers.
Maybe the user was just not happy with your pricing, but you could get him back with the right discounted offer. Maybe the user was just busy, but now she might have time again to use your service.
You should regularly get in touch with your past customers and remind them about your offering, tell them what’s new and give them a peek into what they are missing out on.
Growth Metric – Winback Rate: When you do experiments to improve your Winback journey you should focus on the Conversion Rate and no other metrics.
Growth Hacking is most effective in Customer Lifecycle Marketing. I have seen spectacular results over the years in many industries. There was no case that the Growth Hacking method didn’t lead to improvements and a positive marketing ROI. Any company that is not using Growth Hacking is leaving value on the table. If your competition uses it and you don’t, they will out-grow you with cumulative improvements over time.
