January 12, 2021

Five Stages of Customer Development

At some point in 2021, enough of your customers will be vaccinated and/or have had COVID to allow some semblance of normalcy to return. Not "normal" ... I'm not confident "normal" is coming back and when it does come back it won't be like 2019 ever again ... but "normal" enough to shift your business out of the current mode it operates in.

For so many e-commerce businesses, the past ten months have been all about Acquisition. Most e-commerce businesses (aside from apparel) didn't even have to try hard, the new customers came flying in and have continued since.

So as things start to become "more normal", my e-commerce clients are moving into the third stage of Customer Development.

Acquisition was maximized without significant marketing activities or spend, for the most part ... though some e-commerce brands dumped marketing fuel on the fire and really maximized their opportunity.

The "Welcome" stage was utterly squandered. There needs to be a strong program in place to quickly convert the first-time buyer to a second order, and almost nobody puts in the effort to do this. That's a shame.

So with the opportunity squandered, the customers who self-selected themselves for a second purchase enter the Emergence stage. That's where a ton of effort will be expended in 2021 and beyond. The goal is to develop the customer so that "some" customers enter the Loyalty stage (typically after a fourth purchase ... when a customer has a 60% or greater chance of purchasing again).

The burgeoning Acquisition phase is going to end ... the Welcome phase will be squandered, and the Emergence stage becomes the biggest story of the second half of 2021. Marketers will have an opportunity to develop customers, moving them through the Emergence stage toward Loyalty.

Anybody not focusing on this framework and not developing marketing plans for the second half of 2021 and the first half of 2022 is squandering the enormous blessing gifted to e-commerce brands on behalf of a horrific pandemic.

Get busy, Dear Readers!

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