In 2024, the most effective marketers are shifting their focus toward the future and away from traditional funnels. They aren't interested in the temporary monetary value a customer brings to their business and instead care deeply about the customer's long-term value — a term that applies to both dealership and buyer. It's not just about what the customer is worth to your business; it's about what your business is worth to the customer. To truly unlock the potential of this shift, we must embrace a new way of thinking: the customer lifetime value loop.
The problem with standard funnels is that they represent a linear path that a customer hopefully takes – from awareness to consideration, decision, and, hopefully, conversion. But, this model is fundamentally flawed in today's market. It's static, one-directional, dismisses all of the nuisances of each individual customer journey, and often neglects the most critical phase—the post-purchase journey. Funnels focus on getting customers in the door but fail to provide a blueprint for keeping them there.
Okay, so the "customer lifetime value loop" doesn't quite roll off the tongue, but follow me on this one. Funnels move people one way: down and out. But let's imagine marketing as a continuous, dynamic loop rather than a one-way funnel. This loop starts with awareness but doesn't stop at conversion. Instead, it looks to transform customers into passionate brand ambassadors.
Let's break down each phase of this customer-centric journey:
Awareness: This is where it all begins. Customers become aware of your brand, often through advertising, word-of-mouth, or online content.
Consideration: In this phase, potential customers explore your offerings and evaluate their suitability. They're not just considering a single transaction; they're thinking about the entire experience your brand can offer.
Decision: The decision phase is where customers make their initial purchase. While this marks a significant milestone, it's only the beginning of the loop.
Retention: Retention is the linchpin of customer lifetime value. In this phase, marketers focus on ensuring that customers are not just one-time buyers but repeat purchasers. A loyal customer is a valuable asset.
Loyalty: As customers continue to engage with your brand, they develop a sense of loyalty. They trust your recommendations and consistently choose your products or services over the competition.
Brand Ambassador: The pinnacle of the loop is when customers become brand ambassadors. They not only trust your brand but actively promote it to their peers, becoming powerful advocates for your business.
The trouble with funnels is their one-and-done approach. They're transactional and miss the bigger picture of cultivating lasting customer relationships. In today's marketplace, customers seek more than a simple transaction; they want an ongoing, meaningful connection with the brands they choose.
Lifetime value loops, on the other hand, cater to the modern shopper’s desires. By nurturing customers through each phase of the journey, we create a cycle where they keep coming back. Trust and loyalty are built over time, leading to brand advocacy and the exponential growth of your customer base.
So, are funnels dead? In a sense, yes. Traditional funnels are no longer sufficient to navigate the complex landscape of modern marketing. The customer lifetime value loop is where it's at—a dynamic, customer-centric approach that fosters enduring relationships and turns customers into loyal brand advocates.
It's time to embrace this shift in marketing philosophy. By focusing on the customer's long-term value and adopting the lifetime value loop mentality, your brand can thrive in an ever-changing market, creating lasting connections with customers who not only trust your brand but actively champion it to the world.