My 10th wedding anniversary just passed and I spent some time thinking back on the cycle of events and emotions leading up to a decade long relationship. Specifically, how do emotions and intent drive the behaviors and messaging necessary to be successful at each stage. Don’t tell my wife, but its easy to use the same terms that describe the stages of a relationship with a person as to describe a relationship with a product.
Think about it. The cautious optimism of courtship combined wih a sincere interest to satisfy a need. Then the giddy excitement of the honeymoon and the time spent trying to figure out how to best work together. As the years roll on, however, the excitement turns to the familiar, and early passions transform into the strength of earned trust and reliability.
The following set of blog entries will look at the Customer Cycle and provide detailed framework to understand the life cycle for your product and define specific steps to leverage this understanding to tailor customer treatments and messaging to drive customer satisfaction, loyalty, and repeat purchase.
AGENDA
Mature Customer. After the thrill of the wedding fades, when the majority of features, quirks and applications are known, the customer moves into the mature stage of the life cycle. At this point, the novelty and niceties of the newlywed phase have faded. In their place is a deeper level of understanding about the true character and how it fits (or doesn’t fit) into their life. Trust (or distrust) becomes the foundation for the mature relationship, as the reliability of ongoing product performance determines the longevity of the relationship.
After ten years of marriage, I feel like my wife and I are going into the mature stage of marriage. Based on trust, understanding, and mutual purpose, together we try to make life better. But why did it take 10 years to get to the mature stage? More importantly, what are the behaviors that will ensure success in the next stage of our relationship?
For a consumer product it may take a lot less time to move from a new customer to renew and ultimately loyal customer based on trust, understanding and mutual purpose. But the relationship each of us has with products and brands has its own life cycle and stages that can be understood. By understanding these stages, we can work to make sure the relationship will evolve and last.
In the next section we will explore how to create a detailed understanding of the customer life cycle for different products.
How can we understand a relationship in its many forms? What are the stages, how long do they last? What actions can be taken to ensure the relationship succeeds? Across forms and physicalities, from virtual credits to Venetian glass, all products fall somewhere on the spectrum of the following dimensions or customer touch points:
Let's start with the first dimension: Product. Whether with a person or a product, the substance of a relationship is defined by the utility someone derives from that relationship. The extent to which a relationship fulfils a need and the consumer can understand and access that fulfillment is the foundation upon which a relationship is based. Stated another way, a product’s usefulness can be shown as a function of its utility and its complexity:
Now let's think about Brand. Brands impact a consumer’s concept of the product and their loyalty with it, creating lasting belief structures upon which a relationship is based. How Brands do this is a function of a consumer’s affinity with a brand and the quality/frequency of interactions with it, where; 
Finally, the Purchase Process also has a big impact on the customer life cycle. How? The purchase process introduces friction and frequency into the equation. We can quantify it by measuring the how easy it is for a consumer to make the purchase decision and how often they are forced to make it. This can be shown as:
A soft drink is cheap and easily found, but provides limited utility given the short lived satisfaction, the # of available substitutes and my personal tastes. I am motivated by brand from a taste factor, but I do not wear Coke logos or actively participate in the brand. There are very low barriers to purchasing a soft drink but equally low barriers to exit. Purchase frequency, however, is high, providing me the chance to decide to choose a particular soft drink quite often.
A car on the other hand, provides significant utility and is not especially complex now that I know how to drive. Brand plays a big role in my decision, as brand impacts my conceptions of safety, performance, and how I am perceived by my peers. Finally, a car is relatively expensive and a purchase I only make once every several years.
Let’s look at the last example, a house. Perhaps the biggest purchase decision most people make, a primary residence provides significant utility but can be made complex by things like repairs and available schools. The house’s “brand” can be thought of as how well it matches a person’s aesthetic, lifestyle, and sense of belonging with the neighborhood. As for the purchase process, one typically buys a house very infrequently and with significant barriers to entry/exit including moving expenses.
In the next entry, we will look at how to employ these elements in various methods based on the customer life cycle stage to encourage purchase, use, learning and ultimately loyalty.
Think about it. The cautious optimism of courtship combined wih a sincere interest to satisfy a need. Then the giddy excitement of the honeymoon and the time spent trying to figure out how to best work together. As the years roll on, however, the excitement turns to the familiar, and early passions transform into the strength of earned trust and reliability.
The following set of blog entries will look at the Customer Cycle and provide detailed framework to understand the life cycle for your product and define specific steps to leverage this understanding to tailor customer treatments and messaging to drive customer satisfaction, loyalty, and repeat purchase.
AGENDA
- Stages of the Life cycle
- Defining your customer life cycle with Product, Purchase, Brand
- The chase: Courting Successful Acquisition
- Newlyweds: Learning to live with a new Customer
- Steady as a rock: Maintaining a Mature Customer
Part 1: Stages of the Customer Life cycle
“Its easy to over-complicate relationships” my dad once told me, “but the complications only get difficult when the relationship lacks honesty.” To keep things simple, let's consider the customer life cycle in three basic stages:Customer Acquisition. Perhaps the most fun, this courtship stage is early in the relationship. There is typically a need on the customer's part they are looking to fill. And they have some idea of your product based on any research or brand awareness from advertising. They may have asked friends about your product or even looked up consumer reports. But fundamentally, there is a leap of faith the customer must make to believe the product is truly what you say it is. Customers feel hope and anxiety at this stage.
New Customer. The new customer stage is often about discovery. Flush with the excitement of a new purchase, the consumer is willing to spend time understanding how their new purchase works, how to assimilate it to their lifestyle and address an unmet need. Depending on the product price and complexity, Customers may continue to talk about their product with their social group or look out for additional tricks and applications to get the most out of their purchase. Assuming the purchase fulfilled the need intended, Customers often feel empowered at this stage.
Mature Customer. After the thrill of the wedding fades, when the majority of features, quirks and applications are known, the customer moves into the mature stage of the life cycle. At this point, the novelty and niceties of the newlywed phase have faded. In their place is a deeper level of understanding about the true character and how it fits (or doesn’t fit) into their life. Trust (or distrust) becomes the foundation for the mature relationship, as the reliability of ongoing product performance determines the longevity of the relationship.
After ten years of marriage, I feel like my wife and I are going into the mature stage of marriage. Based on trust, understanding, and mutual purpose, together we try to make life better. But why did it take 10 years to get to the mature stage? More importantly, what are the behaviors that will ensure success in the next stage of our relationship?
For a consumer product it may take a lot less time to move from a new customer to renew and ultimately loyal customer based on trust, understanding and mutual purpose. But the relationship each of us has with products and brands has its own life cycle and stages that can be understood. By understanding these stages, we can work to make sure the relationship will evolve and last.
In the next section we will explore how to create a detailed understanding of the customer life cycle for different products.
Part 2: Product, Brand, Barriers to entry/exit and Purchase Period
"And so students, we arrive at the formula for understanding relationships. Any questions?"
How can we understand a relationship in its many forms? What are the stages, how long do they last? What actions can be taken to ensure the relationship succeeds? Across forms and physicalities, from virtual credits to Venetian glass, all products fall somewhere on the spectrum of the following dimensions or customer touch points:
- Product: Product utility vs. its complexity
- Brand: Affinity and Interaction the Brand
- Barriers to Entry/Exit
- Repurchase Period
Let's start with the first dimension: Product. Whether with a person or a product, the substance of a relationship is defined by the utility someone derives from that relationship. The extent to which a relationship fulfils a need and the consumer can understand and access that fulfillment is the foundation upon which a relationship is based. Stated another way, a product’s usefulness can be shown as a function of its utility and its complexity:Now let's think about Brand. Brands impact a consumer’s concept of the product and their loyalty with it, creating lasting belief structures upon which a relationship is based. How Brands do this is a function of a consumer’s affinity with a brand and the quality/frequency of interactions with it, where; - Affinity = how much a consumer identifies themselves with a specific brand
- Interaction = the frequency & quality of interactions between the consumer and the brand
Finally, the Purchase Process also has a big impact on the customer life cycle. How? The purchase process introduces friction and frequency into the equation. We can quantify it by measuring the how easy it is for a consumer to make the purchase decision and how often they are forced to make it. This can be shown as:Where Barriers are defined as:
- Price relative to the consumer’s purchase power
- Product availability
- Product linkage with other systems/people in the customer’s life
- Required investment in removal and installation of another product
- Purchase Frequency is defined as Low less than 1 year and High as 1 day or less
Plugging in some examples makes this relationship dimension come to life. Let’s look at how this would play out with a soft drink, a car, and a house. For someone with a similar purchasing power as me, mapping out these products against our dimensions might look like this:
A soft drink is cheap and easily found, but provides limited utility given the short lived satisfaction, the # of available substitutes and my personal tastes. I am motivated by brand from a taste factor, but I do not wear Coke logos or actively participate in the brand. There are very low barriers to purchasing a soft drink but equally low barriers to exit. Purchase frequency, however, is high, providing me the chance to decide to choose a particular soft drink quite often.
A car on the other hand, provides significant utility and is not especially complex now that I know how to drive. Brand plays a big role in my decision, as brand impacts my conceptions of safety, performance, and how I am perceived by my peers. Finally, a car is relatively expensive and a purchase I only make once every several years.
Let’s look at the last example, a house. Perhaps the biggest purchase decision most people make, a primary residence provides significant utility but can be made complex by things like repairs and available schools. The house’s “brand” can be thought of as how well it matches a person’s aesthetic, lifestyle, and sense of belonging with the neighborhood. As for the purchase process, one typically buys a house very infrequently and with significant barriers to entry/exit including moving expenses.
In the next entry, we will look at how to employ these elements in various methods based on the customer life cycle stage to encourage purchase, use, learning and ultimately loyalty.