Why Customer Win Back deserves just as much of your attention as acquisition and retention
To paraphrase George Orwell, all customers are created equal though some are more equal than others. Every good CMO knows that customer acquisition and customer retention deserve equal billing when it comes to focus, resources and budget. But how much of the pie is reserved for customer reactivation?
Having a retention as well as an acquisition strategy is a given. But what about your lapsed customers? Those who reached the end of their engagement with you. They haven’t taken any negative action, but they’ve just stopped using you. There they are, blatantly disregarding all your carefully crafted in-life communications and just lying there, gathering dust in your database.
The customer lifecycle is an ever-evolving beast
We are in a world of “always on” and omnichannels, and your customers have an infinite number of choices when it comes to who they continue to hand their cash over to.
Unfortunately customer reactivation is too often an overlooked part of the customer journey. Between onboarding and retention there’s a danger zone that the unwary and unprepared will allow customers to wander into, never to be seen again. It’s called customer attrition and it’s different to retention in one important aspect:
Whereas a retained customer continues to use your product and shows up in your retention rates, a lapsed customer just drops out of sight.
Unless you recognise that lapsing is bound to happen and plan for it. An experienced marketer knows to “fight” on three fronts: acquisition, retention, and reactivation. This is the proper mindset since customer reactivation can be a source of easy additional revenue at a fraction of the cost of recruiting new customers to plug the gap.
It’s not you, it’s them
On average, at any one time, up to 25% of your database are dormant customers i.e. those who have stopped using your product in the last 12 months. Look back over the last 5 years and that figure can go up to 50% or even higher.
But it’s nothing personal. Lapsing customers are inevitable for the majority of organisations. The key is to firstly recognise that it’s all a part of a natural lifecycle, and secondly – not to ignore them. By sending the right message at the right time it is possible to bring them back, reignite their interest in you, and reclaim their share of wallet.
Here are the 5 key steps to take when putting a customer reactivation program together:
1. Do your homework
Everything starts with the facts. Define what “dormant” means for you: one month, one week, one day? Then find out why customers go dormant. Set up a feedback loop so that customers can tell you what’s happened, send out surveys, or use social listening to look for common causes. Get really good at it and you can start to predict when someone is about to go dormant and swing into action.
2. Keep your data clean
Data degrades fast. On average up to 2% of your email list gets outdated every month because people change email addresses, jobs, organisations, etc. Plus the average number of email accounts per person is 1.75 and rising, so people have a tendency to chop and change between in-boxes. So if your customer’s email address changes (and it’s increasingly likely to), keep up. A change of email address may even be an indicator of potential deactivation.
3. Segment the lapsed base
Create a segment of lapsed customers and exercise the same due diligence on those as you would for any others. Create personas and devise unique marketing strategies based on purchase history, previous activity and engagement with comms. Once you’ve got a deep understanding of who they are and what their motivations are – especially their reasons for lapsing - you can target them with specific messages and offers.
4. Try different communications channels
The most obvious format is email, but if a customer has already wandered off in their minds then it’s a challenging medium through which to get their attention again. Plus there’s the danger of your email being consigned to the spam folder. Try a range of channels such as text messaging (no such thing as spam folders and a 98% open rate), or paid retargeting on search engines and social media.
5. Use proven offers and incentives
Give lapsed customers a reason to come back but don’t give away the family farm as it may create a precedent you can’t afford. Research by Return Path shows that even if lapsed customers don’t open your first offer, there’s an almost 50/50 chance they will with future offers. So use progressive offers by all means but don’t dig yourself into a hole by massively upping the ante each time.
Above all – and this is the mantra for marketers the world over – test, test, test. If your customer doesn’t respond to the first offer, don’t write them off. The devil is in the detail and it will take plenty of fine-tuning before you come up with a reactivation program that works across the board.
Whatever you do, don’t discount dormant customers. Accept that some customers are bound to lapse, plan for it, and bring them back into the fold.
To find out how we can help with your customer reactivation marketing strategy, get in touch today.