Customer Lifecycle Management (CLM) is a much used phrase in and around marketing & CRM. But what is it, how do I do it, and more importantly, is it worth doing in your organisation?
Here’s my viewpoint based on over 20 years in and around database marketing, plus a few pointers on how to get started.
What is CLM?
Every relationship between a customer and a company is unique. For companies with large customer bases it’s not feasible to manage each customer as an individual – it’s just not commercially viable. CLM is a broad set of analytical marketing activities that combine to help companies better manage the challenge of defining and deploying personalised strategies at scale, by identifying commonalities that can be leveraged and then delivering joined-up actions to change customer behaviour.
These events are typically opportunities to increase value or threats and risks that need to be mitigated. Events can be large (moments of truth) or small (e.g. Google’s Micro-moments). The actions typically start with marketing campaigns and over time, grow into organisation-wide alignment.
How does CLM increase profits?
In our experience there are three key ways that CLM delivers value to organisations:
- CLM ensures the best action for each customer is delivered at the right time, maximising the impact and conversion rates. The results are more sales, less churn, happier and more valuable customer;
- CLM aligns the organisation behind the strategy for each customer. The target strategy, propositions and messaging determined for each and every customer, can be reinforced at every point the customer touches your company, leveraging the impact;
- CLM reduces wastage and cost, by enabling the organisation to focus on one conversation at a time with each customer, rather than the more normal set of intertwined, spaghetti-like messages that we’re all used to receiving from companies we deal with.
How do I do CLM? Where should my organisation start?
The answer depends on your current situation and your organisational culture, but broadly as a minimum, you’ll need to:
- Align key stakeholders. Where, when & how you do this will depend on your organisation culture & politics. An influential sponsor, aligned leadership and an action-minded Steerco, plus a good deal of hard-work are core ingredients for CLM success;
- Define & map the set of identifiable micro and macro events that can materially impact the value exchange between your brand and your customers, across the whole customer lifecycle. ‘Identifiable’ is a key word here – if the event can’t be recognised on your customer database, it can’t be managed;
- Define relevant, value-adding responses to these events, and the thresholds (scores) and triggers (events) that initiate these responses. As above, the chances are you’ll start with marketing communications and hopefully over time, extend into other domains that impact customer behaviour (such as your collections team);
- Deploy & automate, through as many channels & touchpoints as you can. Likely you’ll start with the channels that you know best – be that email, social, digital, SMS. Clearly the channels need to be direct to the customer – we need personalised messaging here, not broadcast;
- Measure, evaluate, enhance, extend. Provided you measure the important things, you can overlay continuous improvement techniques to incrementally learn & improve. Once you’ve proven the value within marketing, CLM can extend across the organisation.
What else shouldn’t we forget?
- Involve the frontline to avoid ivory tower thinking, and the accountants to make sure the business case stacks-up;
- Start with marketing communications. Broader organisational alignment can follow when you’ve earned your spurs;
- Make sure it’s measurable. Define your key success metrics up front – including hard-nosed commercial measures – and make sure you have ways to measure these, or at least agreed proxy values;
- Build a framework for managing the complexity. Primarily this is all the rules and models to determine who gets which messages and offers, when, through which channels. You’ll also need to have a way to avoid over-contacting customer, and for prioritising conflicting messages;
- Implement as fast as possible. Wherever possible, you should start with the capabilities – data, systems, channels – that you’ve already implemented. You will likely need to invest at some stage, but it’s even more likely that you can make good headway with your existing capabilities.
Want to find out more?
Arctos Consulting are experts in Customer Lifecycle Management. Click here to get in touch with us for an initial conversation.