Whether your customers renew (and expand) their contract is a function of three things: the quality of your product, external factors outside of your control (like the economy), and the customer journey you provide. 

If someone bought the product, let’s assume it can deliver on its stated promises–that is, the features actually work.

Since you can’t control the economy or other factors outside of your organization, that leaves the customer journey. And in order to deliver an amazing customer journey, you first need to understand the customer lifecycle. 

While you might never tell your customer they are on a “lifecycle,” you need this internal piece of knowledge to segment customers properly, attend to their differing needs depending on which stage they are in, and ultimately move them through the stages successfully. 

‍

What customer lifecycles are built for

At their core, customer lifecycles are an internal document that shows the stages of customer maturity. Your goal as a CSM is to understand what success at each stage looks like, where you come in (versus your colleagues in Sales and Marketing), and the kinds of support or accountability a customer needs to progress from one stage to the next. 

While each customer will have a unique experience through the lifecycle, all customers will follow a similar path. Ideally, a customer makes it all the way through every stage in the journey. That said, churn could theoretically occur at any point and cut the lifecycle short (when that happens, make sure you’re conducting churn post-mortems to understand what went wrong). 

What makes lifecycles a bit more complex is that you have to balance multiple personas per customer:

• The experience of the users
• The experience of the economic buyer
• The experience of the decision champions

Generally speaking, you should prioritize the user since things flow up from here – but you’ll need to consider the other types of “customers” that aren’t users since those individuals impact buying decisions.

All that to say – these are internal tools for your reference to help you do your job better as a CSM because it tells you where a customer is, meaning you can from there identify what kind of journey, experience, and support they need

‍

Mapping the customer’s life cycle

Lifecycle stages outline and define typical demands and goals for each step to help you better understand and support your clients. Their success equates to your own as you grow your customer base, increase revenue retention and invest in human assets now to generate monetary returns down the road (renewal revenue, word-of-mouth advertising, brand recognition, etc.).

It’s important to note these stages are customizable and some companies divide these up into additional steps. You’ll likely make changes as you and your customers evolve and learn more about each other.

‍

Stage 1: Outreach

Key team: Marketing

At the beginning of the customer life cycle, your potential customer realizes they have a need and starts searching for a solution. Marketing and word-of-mouth recommendations will inform them of your solution. They will research and evaluate you against other SaaS providers.

Work with your marketing team to disseminate free educational content geared towards the solutions you offer and success stories you and your current clients can boast about. Consider social media posts, blogs, vlogs and demos based on what your target audience uses.

Stage 2: Connection

Key team: Marketing or Sales

This is the stage where you have made a confirmed connection with a potential buyer. It’s important to note this is not the casual lurker stage (e.g. someone reading a blog post). Instead, it’s the moment where you can put some information behind someone—they signed up for a newsletter, downloaded an ebook, or some other passive indication of interest. 

Stage 3: Conversion

Key team: Sales

This is the moment you turn a prospect into a customer. Whether through performance marketing, freemium offers, or a more direct sales approach, you’ve built enough of a connection and enough trust that someone is willing to open their pockets. 

This is also the stage where you identify a customer’s use case and reason for purchase. This information needs to be handed from Sales to CS so onboarding (the next step) isn’t starting from scratch. 

Stage 4: Onboarding

Key team: Customer Success and Sales

This is where CS enters the conversation. At this stage, your only goal is to set your user up for success with a high-quality onboarding program. While the details might look slightly different per customer, you should follow a similar program across everyone.

Stage 5: Experience (usage)

Key team: Customer Success

Customers ideally will start using your product for the reason they purchased. However, even the most eager customers will need support—your job here is to make sure they have the resources they need to use your product. 

In every case, whether a customer is proactive or lazy, you will also have to hold them accountable to the actions they need to take. Adopting a new way of working is difficult for a lot of people, so make sure you’re right behind them with a nudge, push, resource, or helping hand. 

Depending on your business model, this is also a great opportunity to automate some CS processes or bring tech-touch customer success into your process. 

Stage 6: Value

Key team: Customer Success

So your customer is using your product—great! What are they getting out of it?

The foundation of retention and expansion (the next two steps in the lifecycle) is whether a customer is getting some value from your solution. Broadly speaking, that means they are either saving time, saving money, or making money. As a secondary value, they might also find the product easy to use or that using it makes them look good to their team or superiors. 

As a CSM, you need to help them see the value they are getting. That means understanding the value they were hoping to get … and then guiding them toward the action that will get them there. Ideally, your product has features that demonstrate its core value, but if it doesn’t, you can manually walk through how someone receives value from your platform.

This is also the time to continually check customer health scores to see how things are going. If the trend is downhill, your job is to see if you can fix the problem. 

Stage 7a: Retention

Key team: Customer Success

Retention is a process problem as much as a value problem. As a CSM, you need to ensure that renewal feels smooth and is tied to value. 

That means paying attention to two things:

• Continually demonstrating value: This might mean additional support but it could also mean backing off a bit and letting users do their thing. 
• Communicating about renewal: Validating that a customer is happy and is made aware that renewal is coming up. This could also be a time to discuss expansion (more on that in the next step).

Stage 7b: Expansion

Key team: Customer Success and Sales

If customers are seeing value, you might notice an opportunity for expansion (like nearing usage maximums for their pricing tier). In that case, you should run a Customer Success Qualified Lead (CSQL) process, bringing Sales into the equation depending on how your organization handles expansion. 

‍

Support for SaaS customer success

Loyal supporters renew their services with you time and again while also branching out into expanded offerings. With any luck, you’ll turn a portion of your customers into staunch supporters and brand ambassadors who advocate for you via word-of-mouth and social media channels, touting the fantastic SaaS company that you are.

Just as your customers need support to achieve their goals, so do you. Invest in good quality customer success software to make building out your customer journey and following up with your clients to support their success easier.

‍

Infographic

Understanding the different stages of a customer's journey can help you provide better support and meet their specific needs. By helping your clients succeed, you also help your own business grow by increasing your customer base and retaining revenue. Keep reading to know more about the eight stages of the customer life cycle in this infographic.

‍