Running a subscription-based business model has some similarities with classic retail or ecommerce, however, there are some significant differences. Often, the client lifecycle journey is longer and more complex than a standard customer lifecycle journey, and as such, there are more areas of attention and more things that can go wrong.
From being totally unaware they have a problem, to reactivating their lapsed subscription, there are countless stages and subdivisions along these journeys that provide an opportunity to learn more about your customers and how to help them. We’re going to show you how to build a customer lifecycle map, and talk in detail about how you can leverage each stage to maximize its benefits to both you and your customer.
Let’s jump right in!
The Subscription Lifecycle Journey in the Context of a Customer Lifecycle Map
When buying a candy bar at the checkout of a gas station, the majority of the customer lifecycle can be condensed into a single minute. In many cases, simple retail purchases like this are a lot simpler and more spontaneous than for customers purchasing subscriptions.
Subscription customers, including software-as-a-service (SaaS) are one of the types of customers for whom this journey is a lot longer, and extends well beyond the initial conversion. In fact, with a long-term subscription, the conversion itself is much closer to the beginning of the customer journey than the end.
This lifecycle is a marathon, rather than a sprint, and this marathon runs a course that’s laid out using a map. The customer lifecycle map for SaaS customers can be divided into the following five stages:
- Acquisition – this is the stage at which you identifying leads and converting them to customers. This stage involves a very complex and diverse set of skills and disciplines ranging from communications to media marketing and sales. Lead generation is a critical part of this stage, which entails focusing understand the ideal customer profile (aka ICP) while targeting those with that profile and nurturing contacts along the sales funnel. This stage itself can be broken down into several stages of awareness from unaware to most aware, and we will go into these in more detail in the next section. Your company will be leading your customers through each stage of awareness by tailoring the outreach to guide them from totally unaware, to ready for conversion. The acquisition stage ends at the sale, at which point, the customer often engages with the onboarding specialists.
- Onboarding – This is where you get your customers off to the best start possible with their subscription. Data suggests that onboarding is the most crucial step in ensuring a long-term relationship with a client, and a positive onboarding experience for the customer pays dividends to the company later on in their lifecycle. This experience is the key focus at this stage, and your onboarding teams will be tasked with easing them into your product and helping them with how to reach their stated goals.
- Engagement – Once a company has been onboarded, it’s critical to maintain a level of engagement. This stage is where you keep the momentum rolling, and provide compelling value for your clients to continue to leverage your product or service. The more engaged your customers are, the more chance they’re getting value out of your product.
- Retention – With subscription services or SaaS, the retention is simply a renewal -- the customer continuing to use your company. Often, this is the outcome of your previous stages, combined with external factors beyond your control. Customers will always come and go, and this stage involves figuring out whether there was anything you could have done differently to hold onto the ones who went, which is called "customer churn". Understanding this stage is a far more internal and data-driven process, but combines customer perspectives to develop strategies to minimize the amount of churn you’re experiencing.
- Reactivation – This stage represents a return to the service for previously churned customers. This is an often-overlooked stage in the lifecycle journey, yet it represents significant cost savings on new customer acquisition and onboarding. Many people cancel subscriptions for reasons beyond your control, and understanding this is the key to making it easy for them to return. So, the reactivation stage is the final series of processes, designed to bring back customers who churned.
Understanding each stage of the lifecycle, and how they fit together as a complete member lifecycle journey is the first step in understanding how to make use of each point to facilitate a smooth transition between them, and ultimately, to your ROI on each customer.
How to Maximize the Impact of Each Stage in the Customer Lifecycle Journey
In order to make the best use of these stages to maximize your company’s success with its customers, they need to be designed and implemented according to their strengths. Customer outreach needs to be tailored to the stage of the customer along their journey in a way that understands exactly what they’re looking for and how to provide it.
Consider this process as a way to form relationships and nurture a prospect to their desired outcomes with your product. This is a learning and growing process, and your approach needs to adapt as the customer grows. Here, we again break down the journey and provide ideas of how your approach will be most effective at each step.
Acquisition: Stages of Awareness
We mentioned that the acquisition stage can be subdivided into stages of customer awareness, and it’s worth expanding on these for the sake of identifying areas of focus for any subscription-based company to make improvements to their customer lifecycle journey.
Lead generation will be mostly designed around content marketing for subscription-based business models, and the content for each of the awareness stages will differ accordingly. This is where your input is most critical and the way you make use of this content will determine how successful you are at getting conversions. Here are the five subdivisions, or stages of awareness, and how your content needs to function as a bridge from each to the next.
Stage 1 – Unaware:
This is the stage at which your prospects have an issue that they’re not yet aware exists. Content that you put out for this stage of the customer lifecycle journey brings attention to the problem itself and isn’t specific to your brand or even your solution. Your content covers the general topic of the pain point, pointing it out, and the format and details of the content is not as important. Of course, try to tailor the content to your ideal customer’s preferred theme, but most important is short-form content that’s easy to access. Remember, your audience hasn’t decided they even have a problem, let alone whether they want to act on it yet.
Stage 2 – Pain Point Aware:
Now that they’re aware of the issue, the content quality is going to shift slightly, to gently nudge your audience towards a solution. Your prospect is now aware that they have an issue, so they’re going to be actively looking around for some more information about it. They will be asking questions about the problem itself, where it came from, and perhaps even what to do to fix it.
Now use content focused on answering these questions. This stage is where your SEO pays dividends. Content should include keywords related to the problem, contain content that delves deeper into the issue, and covers the general topic and themes while suggesting solutions, without pushing a product. Blog posts and forums are good places to focus at this stage.
Stage 3 – Solution Aware:
Your previous content has helped lead your prospect to the concept of a solution and now they’re actively looking for one. They still don’t even know you exist, but they are closer to your brand than they realize. Your content now presents your solution and offers evidence that it actually works. This is where you really leverage your SEO and show up as high as possible among the search results.
Stage 4 – Product Aware:
Your content should be more of the same at this stage, as your prospects are weighing up options. Push more for brand awareness and reach them where they’re looking. Prospects at this stage are not yet ready to buy, so content shouldn’t be pushing for conversion yet. Make sure content is valuable and engaging. Try using how-to guides and product demos.
Stage 5 – Most Aware:
This is the decision stage, and your prospect is ready to buy. If you have done a good job with your content so far, they should have been following the journey you’ve laid out for them, and by now you should be a trusted voice and a recognizable brand. Present your free trials and sign-up discounts at this stage, and nudge for a conversion by making it as simple as clicking a button.
Your sales team will hand over converted customers to onboarding, but where precisely they do this, and how integrated this process is, partially determines the success of the transition. Consider it like a relay race: the receiver of the baton should be well up to speed at the moment of handover in order to lose no time in continuing the race.
A pleasant onboarding experience leads to much greater retention, so it’s critical to make the process as smooth and enjoyable as possible.
Onboarding involves a series of steps and touch points and follows a similar principle of creating valuable experiences for the customer as acquisition, however, this time, it’s personal. During the later phases of the acquisition, onboarding teams should be accessing customer data to plan for a personalized onboarding experience. This data can be collected post-sale, however, the most streamlined approach is to leverage customer information gathered during the sales process itself -- ideally, it's clearly detailed in the sales CRM.
A proper onboarding and implementation team will be able to provide a customized approach from the client's perspective, while being able to manage dozens, or even hundreds (sometimes even thousands!) of concurrent onboarding clients all in parallel.
The trick to a good onboarding process is to leverage automation to your advantage. Often, onboarding specialists spend so much time recapping calls, choosing specific tasks and sending one-off reminders to folks on the client team. Furthermore, it's likely the client has several folks on their side, all who must complete different tasks.
Even with automation, you'll want to ensure you have very clear communication and transparency to enable all stakeholders remain accountable to the desired timeline. Onboard allows you to automate out a lot of these bad friction points and frees you up to work on the personal touches of the user experience. Outline your tasks, engage internal teams, and streamline the entire process all in one platform.
Engagement: Your Customers’ ROI
This stage is where you will focus on making sure that your customers are getting the return they expected from your product. The purpose of working on this stage is to create continued value in their experience with your product and focus on ensuring their success so that they stick around to renew. Often, this stage is managed by an account manager -- more recently, these folks have been called Customer Success Managers (CSMs).
Engagement takes the personal touch to the next level and strives to form a relationship between the CSM, the company and the customer. Segmentation comes in handy here, especially when there are larger customer cohorts to deal with, and especially when you make use of industry-specific best practices or if your CSMs provide strategic input & insights to the client.
The more you identify with your customer, the closer you can work with them, and figure out how to facilitate their ROI. This metric will not always relate to a set financial figure – this depends on the customer and the product – but it is a metric of value, and for engagement, your content will need to be tailored to promote the attainment of this value, whether tangible or experience-based.
Your customer ROI will translate to your ROI too, so take a customer-centric focus here.
Retention: Deeper Insights
As we mentioned, churn is an unfortunate, and the lifecycle for many customers ends here. There are always going to be cancellations; some will be your fault, some will illuminate areas in which you can make improvements and many will have nothing to do with you at all.
The leverage at this stage comes from knowing which is which and then adjusting your approaches accordingly. The first thing to consider is that even when people leave for reasons outside your control, it’s often possible to get them back in the future, as long as you do a good job of keeping the connection warm. Furthermore, it's important to remember that people have deep-networks, have peer groups and switch jobs. Even if a user is part of a customer churn, they may introduce your company to their new company after a job swtich -- especially if they had a great experience with your service.
If your engagement is good, and you are taking the right data on your churn, you should be able to develop processes to minimize losses of customers and maximize retention. In fact, the best companies are able to achieve "net negative churn", which happens when your existing clients upgrade more revenue than the churn looses, creating a surplus on a particular cohort.
For any SaaS, your goal should be to achieve net negative churn.
Reactivation: Welcoming Back
The one thing to remember about reactivation is that it’s more than possible to close the door behind your customer, whether intentionally or otherwise, and this is the key factor in how successful your reactivation procedures will be.
Avoiding this alienation of your churned customers is the principle of everything in this stage, and this means understanding that customer has their own priorities and need to follow their own paths. Sometimes, a customer will leave when they have a sudden financial burden that takes priority. Sometimes they’ll leave because they think there’s a better option; only to return when they realize they miss what they had.
For whatever reason a customer leaves, the door to return should always be left open, and to do this, you can provide a smooth off-ramp when they are leaving. Consider offering the option of account suspension in exchange for cancellation, and if they have a lot of data, perhaps a less-expensive dormant fee to keep the data should they return in the future.
Again, the key here is to remain customer-focused. Those who are the right fit for your product may return; those who aren’t will necessarily leave, and that’s okay.
Your customer lifecycle journey follows a relatively universal series of stages that make up the customer lifecycle map. These stages run through the five awareness stages of customer acquisition through conversions and onboarding, and onto the long-term relationships, you nurture with your customers through engagement.
Each stage on this journey has touch-points at which you can tailor your interactions with the customer to improve their transition to the next. By considering the map in this way, you build an organic and substantial relationship of trust and understanding with your customers, which facilitates the best return on their investment, be it monetary or experiential.
Leveraging these principles will help your company provide the best possible customer experience which will hopefully has extremely high retention rates and therefore a very healthy and fast-growing subscription business. Good luck!