Note: This guest post comes from Joshua Neckes and Brian Thompson at Simon Data. Simon is a tool that transforms your data into clear insights that let you get more out of your marketing. Connect your data in minutes, create customized segments, deploy to existing channels, and discover what your customers want.
It’s a common misconception that lifecycle marketing is about triggers, like triggering an associated email, text, or push notification when someone’s abandoned their cart. At Simon Data, we think that lifecycle marketing is about transitions in the customer journey, when customers move from stage to stage, as they engage with your brand.
Savvy e-commerce companies build sophisticated lifecycle campaigns around these specific, well-defined transitions, seeking to move customers from a less valuable cohort to a more valuable cohort. Optimizing around these critical lifecycle milestones yields meaningful increases in customer lifetime value (LTV).
Each business has its own unique dynamics and transition points. Early on, Instagram found that once a user uploaded three photos, their tendency toward daily app usage increased dramatically. Accordingly, the entire onboarding flow was built and optimized to encourage and incentivize customers to hit that three photo mark.
At Etsy, the team found something similar with sellers: once they’d listed six items on the platform, their LTV increased substantially. As a result, the team spent a tremendous amount of time devising strategies to encourage sellers to list more.
What’s the friction?
Once a critical lifecycle transition point is found, the next step is figuring out how to ensure customers make it through that transition. A given point may have a variety of different friction points that inhibit the transition.
Take the Instagram example: one concern might be availability–a given user may not have three photos that they want to share. For someone else, the issue might be privacy and being uncertain about who might see their photo. For yet another user, the problem could be a confusing process around uploading photos.
Each of these friction points requires a separate “remediation” to help facilitate the transition from “user with less than 3 photos” to “user with more than 3 photos.” It’s through creative ideation, data-driven testing, and cross-channel engagement that companies like Instagram and Etsy are able to build multifaceted programs that cumulatively account for and address these transition points.
Common transitions and their dynamics
While each business has unique transitions and friction points, within specific verticals and industries, there are observable trends across businesses. Below, we explore some of the more critical and universal transition points for e-commerce businesses.
1. Anonymous -> Activated
Regardless of brand, focus, or vertical, an essential transition is when a user provides their contact information. Data-driven brands understand the net value of each new email address, by acquisition channel, and can deploy a variety of interventions to prevent disengagements and bounces. Incentives typically lead the way, but a strong content strategy can often be enough to prompt an anonymous user to opt in.
2. Activated -> First Purchase
Once someone has activated and provided their information, the next transition is that critical first purchase. Here, e-commerce businesses often combine aggressive retargeting with well-honed welcome messages (push, email, or both) that are purpose-built for conversion. This (coupled with activation) is the transition point that receives by far the most investment. It makes sense, of course, as a “conversion” is a favorable metric for measuring growth and future potential engagement. However, excessive focus on this transition can sometimes be detrimental to other critical life cycle transitions (including those below).
3. First Purchase -> Second Purchase
Post-purchase flows are often underdeveloped compared to their first-purchase counterparts. This is typically due to lack of data, or capabilities, to target users based on first purchase dynamics (e.g. item, amount, season, review content, etc.). It’s important to be wary of the several potential friction points that arise at this stage.
A first-time buyer’s initial purchase during the holiday season might have been for someone else; another customer may have bought on a whim, with no real interest in the category; another may have a bad first experience, which is notoriously challenging to overcome. Following initial conversion, marketers should dedicate more resources to driving a second purchase.
4. Second Purchase -> Nth Purchase
While almost every company we see has some sort of post-purchase flow, there’s a very uneven engagement landscape following a second purchase (and beyond). Repeat purchasing dynamics are very company-specific and vertical-dependent. For example: the more diverse a product catalog, the more likely downstream retention will be.
Savvier companies can often provide product recommendations but struggle to intersperse content and branded messaging that reinforces the customer’s emotional connection with the brand. And a purely transactional relationship predicated on personalized offers often leads to disengagement and churn.
In our next post, we’ll cover the next 7 lifecycle transitions and how to better catalyze customer movement from one stage to another. You can learn more about identifying critical lifecycle moments and automating personalized marketing campaigns by visiting Simon Data. In the meantime, check out SendGrid’s Essential Guide To Email Commerce.