So how exactly do you define Engagement & Customer Lifecycle?


I've spent days trying to understand the discussion about engagement that happened here. I’ve also read Drilling Down a couple of times but I still don’t seem to completely understand the meaning of engagement - I mean I do understand the part about realized value being different from potential value and why measuring the “likelihood of activity” is more important than measuring activity alone. I think I also see the point about “activity defines value” and “likelihood to continue defines engagement” but I know I’m missing something very basic... I do have a point to make here tho.

I think one of the reasons for this confusion is how customer lifecycle is defined in general and how Jim Novo and Regis McKenna define it. The general definition of customer lifecycle is based on AIDA  and is more inclined towards new customer acquisition; it’s about how a new customer goes through various stages of a purchase funnel before he makes a purchase. But for making a second purchase (for a similar product), I doubt if the customer would have to go through the entire decision cycle all over again. In this definition, the customer lifecycle is usually about a relatively shorter period of time that customer spends in the upper purchase funnel stages for making decisions.


On the other hand, Jim Novo and Regis McKenna define customer lifecycle as a relationship of a single customer with a company over his lifetime with the company. In fact, it’s very clear from their definition of a customer itself. A customer is defined as someone who has already made a purchase from a company and the company has reasons to believe that the customer is going to make more purchases from them in future. If the company knows that the customer is not going to purchase from them again, the it's a former customer and all those who haven't yet purchased anything from the company can't even be called customers. So, precisely a customer is someone who already has a relationship with the company and the Customer Lifecyle for this customer is about what happens to him over his LifeTime with the company. It’s about measuring engagement and dis-engagement of this customer as he moves thru his lifetime with the company, which could be anywhere from 1 to 20 years or more. 

You see the point? AIDA/REAN/whatever are more about purchase funnel kinda customer lifecycle (short where the focus is on Reach-Engage-Activate) whereas Relationship Marketing (Jim/Regis) definition of Customer lifecycle is about a customer’s lifecycle (long/very long where the focus is on Nurture) with a company over his lifetime. Of course loyalty/nurture part of purchase funnel models can be argued to define customers' lifecycle across their lifetimes but we know that's not how it's used!!


I think the reason behind the unhealthy focus on pre-nurture part of customer lifecycle is that - a disproportionate number of online buyers are one time buyers and even if the loyalty part of these one-time-online buyers manifests in offline channels, we haven't been able to connect the dots yet. If for instance, we could figure out that digital channels are driving huge offline loyalty, would we still use web analytics to focus on Reach-Engage-Activate or would we think about using web analytics for Nurture/Loyalty (and btw, anonymous new vs. repeat visitors stats doesn't qualify for loyalty)??



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