SAAS - Customer Life Cycle

The customer's life cycle (eng. Customer Lifecycle) is a term that describes the steps that a customer goes through when he finds out about a company's product, makes a purchasing decision, pays for it, uses it, and becomes a loyal consumer. Of course, this is a general definition and when it comes to a specific industry, a number of clarifications are required. Often very significant, especially when it comes to SAAS.

SAAS (Software as a Service) is a service software provided to the end user via the Internet. The life cycle of such a client is different from the client of ordinary software when the purchased product needs to be installed on the user's computer. The main marketing difference is that SAAS services are provided by subscription, and not on the basis of periodic payments (update, purchase of new versions, etc.).

First of all, I would like to show the customer’s life cycle in the classic business model:


This is one of the most adequate schemes that I have met. Taken from the article “ The 7 Stages of Perfect Customer Lifecycle ”
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Here the finiteness of the process is very clearly visible. The client after the purchase comes to the end of his journey. For the next purchase, you need to pass it through the funnel again. Yes, it will already be “heated”, especially since if the previous sales process went without problems. However, the longer it takes between sales, the less effective these benefits are.

With regard to SAAS, the approach should be different. The main reason is that the company will not be profitable if its services will be sold one-time or only short-term subscriptions will be sold. For myself, I derived the following model of SAAS client life cycle:


Customer SAAS life cycle

I see the point in dividing the cycle into 2 stages. The main reason is that they require different approaches and often different people in order to work with them effectively.

1. Sales Process - Sales Process

a. Attract traffic - attracting potential buyers: advertising, articles, speeches, etc.

b. Capture leads - lead capture, i.e. collecting information about potential buyers. In the case of SAAS, it is a registration, or filling out an application, in the case when a complex, multi-faceted service is sold.

c. Educate users - user education. By the end of the trial period, the user must be ready to make a purchasing decision. With proper training, the user will learn to use the full potential of the program, will get used to and integrate into their business processes. In this case, the question of the purchase will be only a formality.

d. Convert sales - the sale of the service itself, the user selects a plan and transfers money.

2. Maintenance & Support - post sales support, one of its goals is to ensure subsequent purchases of the program.

a. Continue to add value - permanent service improvements.

b. Learn your customers - the purpose of support is to explore the needs and requirements of users.

c. Collect, Measure & Analyze data - the constant collection and analysis of information will provide the basis for making decisions about further improvements to the service.

d. Build new features - creation and implementation of new service features

At this stage, improvements should be brought to the fore and serve to attract new customers.