Why Growth Marketers Can’t Live Without Lifecycle Marketing
Venture-backed businesses have huge growth expectations. But growth often comes with a hefty price tag. As many fallen direct-to-consumer (DTC) brands can attest to, Google Ads have become prohibitively expensive and Facebook CPCs are hovering around $1.72 per click. If performance channels are the growth engine for your company, you may need to rethink your strategy unless you can find ways to acquire customers profitably.
That’s where lifecycle marketing comes in. If you’re a marketer in charge of growth, you need to focus on the entire funnel, not just acquisition. Doing so will help you to acquire more customers than you might think possible, plus increase your customer lifetime value, enabling you to spend more on acquisition marketing and to do so more effectively.
Lifecycle Marketing Means More Money to Spend On Acquisition Marketing
Any good startup investor or CEO will look at a company’s customer acquisition cost (CAC) to lifetime value (LTV) ratio. Said simply, your CAC needs to be less than the value derived from each customer. This is what makes a business profitable and it’s often one of the main metrics venture capitalists use to make investment decisions. I’ve often heard that a 1:3 relationship between CAC and LTV is a good benchmark to shoot for.
So while your company may need to grow fast to meet your investors’ expectations, it also has to do so profitably. If profitable growth has plateaued, you can either look to cheap strategies like SEO, or you can increase the lifetime value of your customers and continue growing with the same channels you’re using today.
When I look at businesses that have stalled, one of the first places I look is in their lifecycle marketing strategy. Why? Because, in theory, if you’re reaching your customers with the right message at the right time, the likelihood of them taking a desired action—like making a purchase—is much higher. This is the wisdom behind Braze Canvas, which enabled me to increase patient LTV at telemedicine startup PlushCare and subsequently drive more growth within existing channels.
Seal a Leaky Funnel With an Effective Lifecycle Approach
When Facebook or Google campaigns aren’t performing, many marketers will look at their ad targeting or their creative messaging as the likely culprit. But sometimes, there’s nothing wrong with the acquisition campaign, and all that’s missing is a gentle nudge from a lifecycle marketing campaign.
I once consulted for a company that had no problem acquiring app downloads for a couple dollars a piece on Facebook, but couldn’t get anyone to pay for their premium service. So while their cost of acquisition of a downloader was only ~$2, their cost of a paid user was almost $300. The unit economics were completely upside down!
However, I quickly realized they were doing nothing to nurture their users to a paid subscription. Through a combination of timely email marketing and in-app messaging, this company was able to achieve consistently profitable user acquisitions, and went on to raise a $5M Series A.
The message here is that you need to look beyond the channel and really visualize the entire customer journey. There’s often one or two places you should be able to inject a moment of great customer nurture and move users further down the funnel.
The Halo Effect: Activating Happy, Loyal Customers
Growth marketers should always be on the lookout for free customers. Free customers drive down your total cost of acquisition. And delighted customers are more likely to tell others about their experience. There is a high correlation between customer happiness and propensity to refer customers. And 92% of consumers trust referrals from people they know. That number is staggering. It means every customer touch point should be thought of as another opportunity to get free customers!
Great lifecycle marketing allows you to transform every customer touch point into a unique and timely experience. Your brand will resonate much more deeply with customers if you use language-based personalization or real-time information like local weather to tailor a super high value experience.
I don’t care what business you’re in, happy customers are loyal. So you should always be on the lookout for lifecycle opportunities that create miracle moments or move your brand story along.
Other lifecycle engagement tactics I like for improving customer experience:
- Webinars and speaker series
- Buy One, Give One promotions
- Free Courses
- Surveys (people like to be heard!)
If you’re a growth marketer, you can’t afford to miss out on free customers. That word-of-mouth factor is one of the easiest ways to acquire customers
Pro tip: Don’t miss out on opportunities to use your product to amplify free customer acquisitions as well. Look into referral programs and other viral mechanisms you can inject directly in your customers’ normal path to purchase.
Almost every Growth Marketer knows the traditional acquisition channels like SEM, SEO, Facebook, and affiliate marketing. But truly great growth marketers can and should separate themselves with an acute understanding of the full customer journey. Failing to utilize lifecycle marketing means missing out on a lot of free customers and the ability to nurture customers through the entire journey.