The process of acquiring and sifting traffic into engaged, and ultimately people that buy from you is critical to your customer acquisition efforts. Managing your “audience” is often referred to as the early stages of the “Customer Journey.” In this column, we’ll focus on the core and most pivotal part of your relationship with the customer –when they buy your brand.

Based on some years of experimentation and measurement, we can share a simplified and highly actionable approach that can make a difference in how you value and grow value among Customers. This is the Buyer Life Cycle.

Mike Ferranti chart


Prospects: Before They Are Customers

Prospects, of course, come from many places: word of mouth and direct visits to your website and to your retail stores. Advertising and search drives them to on- and off-line points of sale. Prospects can be those who simply signed up on that ever larger email signup popup on your homepage, or those who put items in a cart and “almost” purchased, but abandoned.

But prospects can also be those who we leverage statistical intelligence to hand-pick not just look-alikes but the “buy alike” prospects with the highest potential value. See my prior column called  The Most Important CRM Metric You May Be Overlooking).

All of these prospects have the same thing in common, they have not purchased, and a level of investment and communications will be required to drive them to the next step. This cannot be overlooked without consequence. Prospects, regardless of the level of engagement or targeting, have a massive, and in some cases, a predictable difference from the buyers you seek to drive incremental sales from –they lack the most powerful signal of all behaviors –actually spending with your brand. Commonsensical enough, perhaps –but the prospect ‘batch and blast’ marketing that pervades retail emailers typically makes the challenge harder. Customer Intelligence is required to target, learn and test your way into viable prospect conversion strategies. We reiterate this point as it is often assumed that prospects when contacted will just buy –and they don’t. The bar is higher (see Bigger is Better: How to Scale Up Customer Acquisition Smarter for how to target the right customers, and the sophistication your competitors may be leveraging already).

To be sure, an analysis of your prospect base, which in a great many organizations is actually called the “email file” –another issue in itself ― will help you determine who is likely to buy and who is not. This can be achieved by considering engagement measures like opening and clicking your emails, visiting the website, and micro-conversions. While these behaviors are correlated with the move from prospect to buying, it is not uncommon for the “average” prospect files to contain too many records of individuals that will never buy –they are lookers, not buyers. They may lack the means, intent, or occasion to buy –or they may have experienced some change in their life stage that moved them out of the market for your product. The opportunity is in identifying the highest value prospects and investing more thoughtfully in converting them.


Active Buyers: Those Who Buy, and In Recent History

Actives are the individuals who are currently spending with you. They have made purchases in recent history and are always comprised of two high-value groups. Those who made their first purchase, and those who have begun to develop loyalty and make subsequent purchases. One-time buyers can present a unique challenge to retailers who are focused on acquisition, but lack a functional strategy to develop loyalty.

Your objective for Active Buyers is to keep them buying, this can be done so by identifying the purchase cadence they have exhibited, and using that intelligence to inform communications when they are likely to buy again.

As a strategy you should keep a lid on how frequently you mail this group. They have a good relationship and higher likelihood to buy again, it is not necessary to over-promote to them. Instead of every message being a call to buy, test your way into messages that are appreciation focused and recognize them. You’d be surprised how that can lead to a bump in new sales. Also, share the things that are new with them and distinguish the 1st time buyers who you need to invest in educating about the brand and your unique value proposition from those that are more loyal and experienced in the brand.


In Market: Customers Likely To Buy Again Around… Now.

In an ideal situation, you would know when every buyer in your database was prepared or even likely to buy again. Logically, that kind of Customer Intelligence would materially reduce missed opportunities. While marketers are beginning to use more sophisticated models like “Next Most Likely Purchase” which pinpoints the window in which a customer is most likely to buy.

When you do identify those customers that are moving to “In Market,” you’ve got the highest performing segment of your database primed for spending, not only based on who they are or what they bought in the past –but who they are to your brand at a given and pivotal point in time.

This can be accomplished through the statistical methods which looks across your customer and purchase bases. It can use peer groups based on buying behavior and timing of purchases for various groups of customers. These models can be very effective and have stunning ROI when the lowest cost touch is used first and escalating touches and offers are used subsequently.

When we study marketing databases, it is fascinating to watch buyers moving into “In Market” every day –missing this opportunity gets expensive –as those individuals should have reverted to Actives, but instead begin to “fade” in relationship and  in value to the brand. Share positive reviews on new products to help accelerate the next purchase –and ensure the growth of your buyer relationship and customer value. As they approach the end of the likely purchase window, move to a more aggressive offer such as free shipping, special limited edition, hot product, or use a discount to keep them from moving to the faders group.


Faders: Active Buyers That Missed an Expected Purchase

Faders are individuals that we expected to have bought –but did not. We may not know why, but the interrogation of a segment and other market conditions can help us understand. In one instance, a brand stopped a seasonal sale that they formerly had every year at the same time. Loyal customers looked forward for a chance to “shop the sale” –and it had become part of the brand experience they knew. The sale wasn’t replaced –and the Fader metrics spiked accordingly. Having the Customer Intelligence to see this and quantify the impact is invaluable in developing pricing, promotion and general marketing strategies.

Faders need a message with an edge. One edgy brand we’ve worked with used a creative treatment effectively that started with “Was it something we said?” The objective was to break out of “standardized” messaging (that was usually about the product or sale) and ask them to take another look. It worked. Creatives enjoy producing situation-specific creatives that solve problems and capitalize on the opportunity that Faders present the brand.


At Risk: The Buyer Has Stopped Spending with Your Brand

When your Customers fall into what we call the “At Risk” category, they are statistically most likely to fall into attrition. They have missed multiple purchase windows. At Risksmay be likely to fall into attrition, but they can also be rescued. Like all other stages in the Buyer Lifecycle, this is a behavioral view –which means there is behavioral (buying) evidence that those who are “At Risk” can be rescued, and moved all the way back to Actives.

This group responds more to a change in messaging, resting their segment of the file, especially when there is evidence of over-promotion.  Changing channels has shown evidence of working as well. Sometimes marketers are uncomfortable going from an “email only” relationship to a “co-targeted” communication strategy –switching from email to a direct mail piece for a well thought re-engagement touch is proven to be one of the methods that move individuals back to spending “Actives.”


Inactives: Statistically, Most Won’t Buy Again

Inactives are those that have missed numerous likely purchases and have not purchased on cadence or off. They have stopped buying. Inactives rarely convert back to buyers. Often times the buyer is a one time buyer who wasn’t the “right customer” for the brand, price point, value proposition and may have engaged in trial with your brand, but subsequently disengaged (for more on picking the right customers in the first place, see “The Most Important CRM Metric You May Be Overlooking).

Strategies and expectations for the inactive are limited. One simple strategy is to treat Inactives as Prospects again, since they are statistically not buyers anymore.

It is also advisable to rest that segment of your database before re-engaging them. You can also keep the highest value buyers from the Inactives as a holdout in your Inactive Segment –and engage in testing of promotions and multi-channel touches.

The most important thing to do with Inactives –is not to ever get there. So time and effort needs to be invested in strategies to continue growing and renewing customer relationships when their behavior upstream changes and when they miss their first expected purchase.


Become an Active Participant in Your Buyer’s Lifecycle
Buyers are the lifeblood of your business, and as is often the case, a small portion, usually under 25% are driving the majority of your revenue at any point in time. This being the case, it is imperative to have a methodical approach to keep your buyers coming back.