CHAPTER 1

The Digital Customer Life Cycle

The progression of stages in the process of finding a product/service, considering the possibility of purchasing it, purchasing it, using it and then recommending (for or against) it is called the ‘Customer life cycle’.

Pre-Digital Marketing/Sales Funnel

The most standard way of understanding a customer lifecycle is by using the Marketing/Sales funnel. The standard Marketing/Sales funnel was designed in a pre-digital age. The most common representation of the funnel is the AIDA model.

For a conventional marketing strategy, mapping a customer’s purchase decisions was fairly linear. The same strategy was applicable to almost any business, and it involved a linear process of the customer becoming aware of a product through print ads, billboards, local guides, and yellow pages, the customer would then interact with a sales executive for information about the product. Having received adequate information, the customer would take some time to consider this information, and the customer would also receive a sale’s call as a follow-up before making the purchase. The process was slow, information was limited and if the buying process became prolongated the likelihood of the purchase would drop significantly, and there were limited non-intrusive ways of regaining the customer’s intent to purchase in case the customer became disinterested.

This is what the original marketing/sales funnel would look like in traditional textbooks.

Image Credit: http://www.startups.ie/the-sales-funnel-understanding-aida/

Another common representation of Marketing/Sales funnels is the TOFU/MOFU/ BOFU model that splits the funnel as a Top of the Funnel/Middle of the Funnel/ Bottom of the Funnel representation.

Image Credit: https://blog.crosshatchcreative.com/ learn-it-quick-the-importance-of-tofu-mofu-and-bofu

Due to the affluence of information available online there have been significant changes in the way a customer indulges in the process of buying. The conventional M/S funnel fails to interpret and preempt the user’s decision-making process. The original AIDA model has six significant shortcomings.

The assumption that a digital customer’s journey is linear

Not acknowledging the fact that a customer can enter the journey at any stage

The lack of detailed attention to each stage of the funnel

The lack of a consistent strategy throughout the funnel phases

Not accounting for the fact that the customer’s decisions are Affected by external influences

The lack of commitment to the customer’s experience beyond the point-of-purchase

Image Credit: https://moz.com/blog/the-anatomy-of-tomorrows-inbound-marketing-strategy-today

This modified TOFU, MOFU, BOFU model illustrated in the image above, accounts for customer retention in the post purchase cycle, but the post purchase cycle for tangible retention of a digital customer is more than a single step process.

Re-Engineering the Funnel

The following terms will be used to address the individuals that enter the purchase cycle.

Suspects

When individuals show interest in the brand or in the products/services they are called suspects. At this stage, the marketer is not sure if these are genuinely interested individuals or just miss-clicks on a digital campaign.

Prospects

As the Suspects move down the first few stages of the customer experience funnel, they are qualified as genuinely interested individuals and are called prospects.

Leads

When the prospects move further down to the middle of the funnel, they are considered as leads.

Leads are further categorized as Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs) as their intent to purchase becomes more distinct.

Customer (Buyer)

A customer is a person that buys the product/service, a customer may or may not be the user of the product. Imagine if you’re buying a gift for a close relative. Although you are heavily vested in the buying process, you may never use the product/service.

Consumer (User)

A consumer is the end user of the product/service. The consumer may or may not buy the product/service but definitely uses it.

These terms should not be used interchangeably. Understanding the difference between a Prospect, Suspect, Customer, and a Consumer allows better tracking of the individual through the purchase cycle.

The Customer Experience Funnel

In this book, you’ll be introduced to a proprietary model designed by eliminating the flaws of the conventional funnel by adding new elements to it.

The Customer Experience funnel humanizes the concept of leads and prospects by treating their experience as necessary as their purchase action.

Instead of the four stages of the AIDA, the Customer experience funnel has five phases:

1. TOFU (Top of the Funnel)

2. MOFU (Middle of the Funnel)

3. BOFU (Bottom of the Funnel)

4. BYFO (Beyond the Funnel)

5. POFU (Parallel of the Funnel)

These phases are broken into ten stages:

1. Awareness (Engagement)

2. Education

3. Research

4. Evaluation

5. Justification

6. Purchase

7. Adoption

8. Retention

9. Amplification

10. Advocacy

Image: Marketing White Board Illustration of the Re-Engineered Consumer Experience Funnel

The 1st three of these phases are right out of the conventional funnel. Beyond the Funnel (BYFO) is represented as an inverted funnel because this phase expands on the existing customers to create new purchases. BYFO is the post-purchase phase of this funnel where the objective is to get the customer to:

Like the product (Adoption)

Become accustomed the brand (Retention)

Buy more products from the brand (Amplification)

Spread positive awareness about the brand (Advocacy)

Parallel of the Funnel (POFU) it is a unique element added to the Customer

Experience Funnel to signify that some elements are consistent throughout the different phases of the funnel.

Conclusion

In the next chapter we’ll take an in-depth look at phases and stages of the Customer Experience Funnel and the strategies required at each stage for designing and sustaining a mutually profitable digital customer life cycle for both the brand and the customer.

CHAPTER 2

Phases and Stages of the Customer Experience Funnel

In order to include the bigger picture, we’ll be looking at each stage with the intent to answer the questions that a customer may have in that particular stage from the customer’s point of view. Understanding the questions from the point of view of a customer, at each stage is a crucial component as it corrects the habit of analyzing the customer journey from a marketer’s perspective.

In a perfect world, the illustration of the customer purchase process would look cylindrical, a cylindrical customer purchase journey would mean a 1:1:1 ratio of brand engagement to purchase action to advocacy but a majority of interested individuals are lost at each stage; therefore, the funnel shape of the customer’s buying process will continue to be the ideal representation.

Image: Marketing White Board Illustration of the Re-Engineered Consumer Experience Funnel

TOFU (Top of the Funnel) Pre-Purchase Phase

The end objective of this phase is to make sure that the brand is attracting a qualified audience. This is the only phase where the strategy and the campaign are not directly linked to the problem statement, the solution or the product itself. The objective is for the suspects to find the brand, have an interaction with the brand, and find the interaction valuable enough to engage with the brand in the future.

Awareness Stage: Generating Brand Engagement

Customer: Do I Like this brand? Is this brand relevant to me? Would I want any/further communication from this brand in the future?

The Awareness stage is about casting a broad marketing message towards the target audience. The objective is to reach as many interested individuals in the relevant segment of the brand’s product/service as possible and then to deliver tangible value to the targeted audience to engage them. The strategy for this stage is to reach as many interested individuals inside the market share of the product or service. In some cases, targeting outside the market share is beneficial because it leads to the creation of a hybrid market segment that has lesser completion (cross-segment selling).

Cross-segment selling is based on associative assumptions. A green tea selling company can either target the market share of tea customers that are already being exposed to a large quantity of tea related advertisements or the marketer can derive the associative assumption of targeting the market share of fitness products, deriving from the product’s attribute that it has health benefits (the product being green tea).

An interested individual (suspect) that shows interaction beyond this stage is classified as a prospect.

You’ll learn more about segmentation, brand messaging, and the process of mapping the product’s attributes to customer profiles in the upcoming chapters.

Education Stage: Identifying the Problem

Customer: Do I have a problem?

The objective of this stage is to make the prospect realize that they may have a problem/pain point and the solution to that pain point is the brand’s product/ service. In some cases, the prospect has already realized that there is a problem, or due to the nature of the product the problem is inherent (taking the green tea example, the product is linked to the betterment of health, the problem of depreciating health due to normal causes is pre-existent in most individuals).

From a perspective of marketing, the focus should be towards identifying the pain points, the challenges, and the opportunities to provide a path to the solution (not the product) at a very broad level. So, for example, if the product is a specific green tea of a particular brand, the strategy is not for the marketing message to say this green tea is better than other green teas. The process should be to identify what matters to the prospect. This is done by identifying the prospect’s pain points and then mapping the product’s value proposition to these pain points in a way that does not hard sell the product. If the green tea is mapped to health benefits and specifically weight loss, the right digital marketing approach is not Our green tea promotes weight loss or Green tea promotes weight loss; buy ours, the right way of educating is more towards 7 natural ways of managing weight with one of the seven ways being the consumption of quality and organic green tea.

Creating, curating, and distributing quality content that educates the prospects throughout all stages of the buying process is called Content Marketing. You’ll learn about Content Marketing Strategies in the upcoming chapters.

MOFU (Middle of the Funnel): Purchase Consideration Phase

The strategy of the MOFU phase is still about providing a solution more than selling the product but, in this phase, the issue of prospect retention becomes more saturated, by this time you’ve educated your prospect enough for them to identify that they (the prospects) have a pain point and need a product/service that provides a solution to this pain point.

Research Stage: Exploring Solutions

Customer: What are the available solutions? Are there factors that I should consider? Are there alternatives?

This stage is called the research stage because at this point the prospect starts conducting personal research outside the brand’s communication. The chances are that the prospect may find a brand that does a better job at promoting the features of its products/services at this stage.

Product benefits, the capabilities and the cardinal competition differentiators should be communicated at this point.

Gonging back to the example of building a campaign for a green tea product, in the education stage, the objective is to promote the health benefits of consuming organic and quality green tea. The brand messaging at the same time should be so strong that the word organic and quality becomes cognitively associated with the product in the prospect’s mind. Take, for example, Xerox. Founded in 1906 Xerox started making copy machines, these machines became so popular that the term Xerox became synonyms with getting a document