Understanding the different stages of a customer’s lifecycle can help you provide better support and achieve success for your business. Each stage has its own unique demands and goals, which can help you build a loyal customer base and increase revenue. It’s important to remember that these stages can be customized and may vary between businesses. As you and your customers learn more about each other, you may need to make adjustments to better meet their needs.

Here are the eight stages involved in the customer life cycle:

Table of Contents

Stage 1: Outreach

Key team: Marketing
In the initial stage of the customer life cycle, a potential customer identifies a need and begins searching for a solution. They may come across your solution through marketing efforts or recommendations from others. At this point, they will compare your offering with those of other SaaS providers. To assist with this process, collaborate with your marketing team to share educational content that aligns with the solutions you provide, as well as success stories from your current clients. Utilize social media, blogs, vlogs, and demos that cater to your target audience’s preferences.

Stage 2: Connection

Key team: Marketing or Sales
At this stage, you have established a confirmed connection with a potential buyer. It’s crucial to understand that this is not the casual browsing stage, where someone simply reads a blog post. Rather, it’s the moment when you can gather some information about the person – they may have signed up for a newsletter, downloaded an ebook, or shown some other passive indication of interest.

Stage 3: Conversion

Key team: Sales
This is the critical juncture where a potential customer becomes an actual customer. Whether through performance marketing, freemium offers, or a direct sales approach, you have established enough rapport and credibility that someone is willing to make a purchase. Additionally, this is the point where you can determine the customer’s specific needs and reasons for buying. It is essential that this information is communicated from Sales to CS, so that the onboarding process can build upon this foundation, rather than starting from square one.

Stage 4: Onboarding

Key team: Customer Success and Sales
When it comes to onboarding, CS plays a crucial role. Your main objective at this point is to ensure that your user is equipped with a high-quality onboarding program, tailored to their specific needs. While the specifics may vary from customer to customer, it’s important to maintain a consistent program for all.

Stage 5: Experience (usage)

Key team: Customer Success
Customers typically begin using your product for the reasons they purchased it. Nevertheless, even the most enthusiastic customers may require assistance. Your responsibility is to ensure they have the necessary resources to effectively use your product. Regardless of whether a customer is proactive or not, you must hold them accountable and encourage them to take necessary actions. Many people find it challenging to adopt new ways of working, so it’s essential to provide support through nudges, resources, or a helping hand.

Stage 6: Value

Key team: Customer Success
As a CSM, your role is to assist customers in recognizing the value they receive from your product. This involves comprehending the value they intended to gain and directing them towards the actions necessary to attain it. If your product lacks features that exhibit its core value, you can manually walk through the process of how value is received from your platform. It is also important to regularly monitor customer health scores to assess their satisfaction. If there is a downward trend, your responsibility is to investigate and resolve any issues.

Stage 7: Retention

Key team: Customer Success
To guarantee a smooth renewal experience that is linked to value, CSM should focus on two important aspects.

It’s essential to consistently showcase the value of the product or service being offered. This could involve providing more support if needed, or perhaps giving users the space to operate independently.
It’s crucial to communicate effectively with customers about the renewal process. This involves ensuring that customers are satisfied with the product or service and are aware that renewal is approaching. Additionally, this could be an opportunity to explore options for expansion, which will be discussed further in the next step.

Stage 8: Expansion

Key team: Customer Success and Sales
If your customers are finding value in your product or service, you may realize that there is room for growth (such as approaching the maximum usage limit for their pricing level). If this happens, it’s a good idea to initiate the Customer Success Qualified Lead (CSQL) process, and involve the Sales department depending on how your organization handles expansion.

8 Stages of the Customer Life Cycle