Lifecycle Revenue Marketing

What Is Lifecycle Revenue Marketing?

Lifecycle revenue marketing (LRM) is an evolved approach to B2B marketing that goes beyond the traditional focus on acquisition and demand generation. Instead, it puts an equal (if not greater) emphasis on retaining existing customers and growing revenue through upselling and cross-selling tactics.

To simplify it, LRM is an approach to marketing that focuses on revenue a customer brings in throughout their entire time as a customer (i.e., their lifecycle). While most organizations focus on acquisition (the first sale) and retention (ongoing customer engagement) separately, LRM is a holistic approach that integrates both of these concepts under the umbrella of revenue growth.

The concept is a lot easier to understand when it’s broken down into its two components:

• Lifecycle revenue — The total value of all sales to a customer over the course of their entire life as a customer. This includes any upfront purchases or services, add-ons or upgrades, and/or renewals and subscriptions.
• Marketing — All activities used to acquire, retain, and grow customers through various channels (e.g., email campaigns, social media ads, and website content).

The term, coined by Forrester in January 2023, is based on the premise that customer satisfaction, loyalty, and long-term growth are best achieved through a long-term relationship. The goal of LRM is to identify and capitalize on untapped potential within each customer touchpoint.

Synonym

• LRM

Why B2B Organizations Need Lifecycle Revenue Marketing

While older paradigms like account-based marketing (ABM) are not completely outdated, LRM suggests a reconfiguration of priorities. That way, a company can ensure its marketing efforts are as fruitful in sustaining and expanding customer relationships as they are in creating new ones.

Changes in Buyer Behavior

Today’s buyers are more connected, informed, and demanding than ever before. They have access to a wide range of information and resources that allow them to shop around quickly and compare products. As a result, they expect personalization at every stage of the customer journey.

Gartner Sales Insights reports potential buyers are typically 57% to 70% through the decision-making process by the time they reach out to sales. Buyers spend 17% of their time meeting with potential suppliers, meaning any one vendor has 5% or less of the buyer’s total time to get their message across.

With the shift to self-service, companies need to adopt an approach that focuses on nurturing the customer through ongoing marketing communication and content they can view on their own terms.

Addresses Frontline Marketing Challenges

There are three core challenges that frontline marketing teams must overcome to be successful in today’s complex buying environment:

• Coordinating across marketing silos
• Creating a single view of the customer
• Adapting programs to cater to diverse buying behaviors

Through the use of CRM software and a customer data platform (CDP), companies implementing lifecycle revenue marketing can ensure that all customer-facing teams have the same view of a customer’s interactions with the brand. It also lets B2B marketing teams set up automations (e.g., product recommendations or enablement content) based on customer actions, such as email, blog post, or pricing page engagement.

Sustainability Depends on Customer and Revenue Retention

Particularly in the B2B SaaS space, which heavily relies on subscription sales, retention is the only way to build a sustainable business. A company spending all its efforts on acquisition can never grow past a certain point because it’s constantly replacing customers who churn.

The fact of the matter is it’s 5-7x cheaper to retain a current customer than find a new one to replace them. That’s part of the reason potential investors look at retention first — it’s a better indicator of success than almost any other metric.

Plus, the probability of selling to an existing customer is between 60% and 70%. A company’s chances of selling to a new one is just 5% to 20%. By focusing on adding more value to existing customers and improving the customer experience, a company can drastically increase its revenue (and conversion rates) without having to invest in expensive acquisition campaigns.

Benefits of Implementing Lifecycle Revenue Marketing

At its core, lifecycle revenue marketing is about creating a perpetual growth engine by giving equal weight to customer acquisition, retention, and expansion. This offers untold benefits for the organization and the consumer.

Align Frontline Marketing with End-to-End Customer Lifecycle

Lifecycle revenue marketing is all about creating a seamless, end-to-end customer experience. This means that each department — from sales to customer service — has to work together with the same goal in mind: growth through retention and expansion.

By adopting lifecycle revenue marketing, frontline marketers shift their focus from only creating content focused on moving leads through the sales funnel. They adopt the mindset that it is their role to continually help their customers get more value out of their product (and, ideally, expand their own opportunities in the process).

Improve Audience Engagement Along the Customer Lifecycle

Buyer engagement is quite high during purchase and onboarding processes. But once sellers close the deal and the customer starts using the product, engagement tends to drop off sharply.

Frontline marketers using a lifecycle revenue marketing approach can continue to publish content and share messages that align with their customers’ ongoing product use and business challenges.

Reduce Customer Churn and Time-to-Value

A crucial aspect of LRM is customer and prospect training, which is often facilitated through digital academies or individualized onboarding, support, and usage materials. This approach reduces churn by making it easier for customers to continue the company’s product in a way that brings them value.

As for ongoing communication, marketers using LRM use tactics like email campaigns and loyalty programs to keep customers engaged.

Strategies for Using Lifecycle Revenue Marketing

Although the term ‘lifecycle revenue marketing’ is relatively new, the strategies it comprises aren’t. At its core, the premise is simple: nurture customers at every step of their journey and, by extension, create opportunities for revenue growth.

Here are a few tips for using lifecycle revenue marketing:

It starts with the onboarding process.

Long-term customer loyalty is much less common when the customer doesn’t have the resources to actually succeed with the product. A customer onboarding experience could include some or all of the following:

• Hands-on implementation, deployment, and training (for enterprise customers)
• Self-service resources (e.g., online support and tutorials through a customer portal)
• Digital onboarding resources like product documentation
• In-app notifications and product guides for first-time users that encourage product adoption
• A customer success program to help customers get the most out of your product

Use a customer data platform (CDP) for a unified view of the customer.

A CDP lets you collect, organize, and segment customer data from all your marketing and communication channels. You can produce customer-specific insights from this data and create automations on each individual platform your customers use.

When they search for certain product-related content on your site, for example, your marketing automation software could immediately put them into a group of recipients for related product how-tos and feature updates. Or, based on product use, it could suggest an add-on or upgrade. The more it learns, the more personalized their experiences get.

Maximize profits by turning customers into advocates.

Lifecycle revenue marketing should always be focused on customer success, first and foremost. But, there’s also a great opportunity to get customers for to help you acquire new ones.

Customer referrals are one of the most cost-effective methods of generating leads. Plus, those referred by a friend or colleague are far more likely to convert than someone who has stumbled upon your product in an online search.

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