Customer Life Cycles In the Age Of Social Media- Adding Value For the Connected Customer

Those poor marketing departments.

Marketing has always been a tough gig; taking that big idea to the masses and walking that fine line between pumping up interest and becoming intrusive and obnoxious. Being clever without being cloying. Being everywhere that’s needed but nowhere that’s unwelcome. These are the people that we love when we find that must-have” product we can’t live without once we hear about it and, the next moment, revile when we see that ad for The Snuggie come on for the third time during the latest episode of our favorite TV show. A tough gig indeed.

I just want someone to love

Like it or not, we are all engaged in a tango that marketers refer to as the Customer Life Cycle. It is a multi-faceted process that is best summarized in a dating analogy. We begin in the Acquisition phase (“Gee, if only I could get their attention, I know we’d have a great time together.”), move to the Conversion phase (“Awesome! We’re going out on Friday night!”) and eventually move into the Retention phase (“Friday was wonderful! Now, how do we keep the good times rolling?”). In reality, we are constantly going through this process with new brands and products as well as old. We are constantly reevaluating our relationships with the brands we know and exploring new options as they come to our attention.

As with the relationships we have in real-life, our newly connected world has opened up a whole new set of options and elements in how we participate in this ongoing dance. Certainly, anybody who has looked at a website, search engine, or social media site in recent history has seen the profound changes in promotions and advertising that marketers are dealing with. The ability to target and reach new audiences has never been greater- or moved at a faster pace. However, once the partner has been found and the relationship has begun, these new channels and methods pose some significant challenges for the marketer. How do you retain the customer and keep them coming back in an environment where so much competition is vying for their attention (and dollars)?

What’s in it for me?

Customer retention is arguably one of the most important elements of the customer life cycle. The textbook Internet Marketing: INTEGRATING ONLINE AND OFFLINE STRATEGIES (Roberts, Sahay, 2013) summarizes this nicely:

“…it is important to retain customers in order to create the highest possible customer lifetime value (CLV). Retention is most often the result of adding value to the customer purchase and use experience and superior customer service. A planned program of customer contact, carried out at appropriate points in the purchase cycle, can also be a useful component of retention programs.”

It can be seen that customer satisfaction is a clear driver of customer retention and that this can be achieved through customer contact. The question then arises as to what kind of contact will be most beneficial to achieving those goals? As stated in their article “Customer Perceived Value, Satisfaction, and Loyalty: The Role of Switching Costs” (Yang & Peterson, 2004), the authors suggest that the best contact is that which adds value. The authors state:

“Customer satisfaction, in turn, is hypothesized to be influenced by
perceived value. Perceived value, as it has been defined herein, is the ratio of benefits received from providers relative to the costs sacrificed by customers. In essence, it is a variable that reflects the net utility derived from a provider.”

So let’s summarize all of this: customer retention can be driven by perceived positive value of a product or brand, and customer contact that provides a high level of value is one of the best ways to achieve that.

Adding the value

In the world of connected economy, adding value can be a very dynamic thing and there is no single way to achieve this. Traditional methods of offering additional promotions or offers to existing customer can definitely be a starting point but, in many ways, this is simply carrying over traditional customer retention methods that marketers have used in the past.

Web 3.0 offers the marketing community the ability to provide higher levels of interaction and personalization to their customers and this can be a key value driver to providing this critical value. A key element of this is responsiveness and adaptability.

A wonderful example of this is the blog written by Agile Bits, the developers of the popular 1Password password management utility. This blog provides regular posts on both the development of the product and helpful how-to articles as well as responses to news of the day, such as emerging security threats. This provides value to the customers through informational material that allows the customers to gain additional value from the product that they have purchased. It also creates a high level of confidence in the product by demonstrating that the developers are in tune with the way security concerns are developing in the wild. This actually achieves three goals: 1) continue to generate product and brand awareness through information instead of promotion, 2) provide customers with increasing value in their product, and 3) maintain high levels of customer confidence in the product and the brand.

These blog posts are distributed via the Agile Bits website as well as social media. This allows customers to share the information to their friends and colleagues across the web. Thus, the strategy achieves the goals of customer retention through added value while fulfilling a secondary goal of customer acquisition through sharing and distribution via social media channels.

Sometimes value can be added by simply being there for the customer. Social media is a curious thing and mountains can easily be made of molehills. This can work to the benefit or detriment of a brand. Tweets and status updates can be fired off at a whim and these communications can sweep the globe in an instant. A compliment from a customer can travel untold miles and reach thousands or millions of eyes in a way traditional word-of-mouth opinions never could. Unfortunately, so can damaging criticism.

To counteract this, a brand must be highly proactive in how they monitor and address their social media accounts and presence. A brand must be highly vigilant and responsive in their customer interactions to amplify positive mentions and mitigate negativity. This is perhaps one of the most powerful elements of social media for a brand- clever and honest interaction with a customer can turn a negative event or comment into a positive perception of the brand- so long as the brand handles the situation appropriately.

The “Right Way”

So, what’s the right way to add value for customers via the web? Simply, put, there is no single right way. Every business, market, product, customer, and strategy is going to be different. However, there are some key points that will benefit any company that interacts with their customers online:

-Be there and be real. If you are going to interact with the customer, they are going to want something real, not a robot or empty advertising messages. Make sure that you are able to provide that BEFORE you engage.

-Add value. People want to interact with companies that are adding something to their lives. Give people information, not ads. Publish value, not marketing. Build confidence in the brand, not endless, empty slogans. If you add the value first, the promotional objectives will follow.

-Know who you’re talking to. A brand needs to listen before they speak. Customers will guide the strategy in how a company can best add additional value to them. But the company needs to be willing and able to listen to this first.

This takes creativity and attention on the part of the marketer to constantly monitor and modify their strategy and efforts. Perhaps the biggest challenge for a marketer is that much of this occurs in the public eye- customers (and competitors) are able to watch the process unfold to see what a brand is doing right and where they need improvement. This means that a marketer needs to be quick and agile and always looking for new opportunities to add new a novel value propositions for new and existing customers.

It’s a brave new world. Is your brand ready for it?


Zahay, D., & Roberts, M. (2013). Internet Marketing: INTEGRATING ONLINE AND OFFLINE STRATEGIES. (T. Edition, Ed.) Mason, OH, USA: South-Western, Cengage Learning.

Yang, Z., & Peterson, R. T. (2004). Customer Perceived Value, Satisfaction, and Loyalty: The Role of Switching Costs. Psychology & Marketing, 21, 802-803.


~ by ewetzell on February 16, 2014.

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