The Life Cycle of a Customer
While we all love Steve Blank’s approach to get, keep, and grow customers, it is important to understand the life cycle of that customer. There are six life cycles that every Entrepreneur must know by heart in order to grow their business:
- The Life Cycle of Attraction: How much time elapses between first contact and the decision to buy? In most retail businesses, it is somewhere between 24 hours and 9 months. In service industries, this cycle is generally 3–18 months.
- The Life Cycle of Transaction: Now that they have explored and made decision to buy, how long does the transaction take? In a retail setting, it can be a matter of a few minutes at the cash register. In a service business, it can require a proposal, some back and forth for several weeks or months before the agreement is made and work can begin. Is it a click or series of clicks on the web?
- The Life Cycle of Frequency: In some businesses, customers make a transaction every day. In others, it might only be once a year, or several years. How often do they need your product of service?
- The Life Cycle of Expansion: The customer begins with one transaction, one product or service. How long does it take before they buy another product or ask about another service?
- The Life Cycle of Referral: How long does it take before they refer other people to you?
- The Life Cycle of Growth: In many cases, Entrepreneurs find that several things happen: The customer outgrows what they offer, or the customer no longer needs what they offer. How many weeks, months or transactions go by before this happens? In some instances, it is the business that outgrows the customers.
What are the cycles in your business?
We’ll take an in-depth look at The Cycle of Attraction in our next blog.
Faris Alami is Founder and CEO of International Strategic Management, Inc. (ISM). He works internationally, presenting Exploring Entrepreneurship Workshops and other entrepreneurial ecosystem ventures.