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Global Marketers Channel by RuthJan. 11, 2019

Ten Tips for Customer Reactivation

Are you looking for the best ways to reactivate dormant customers and reduce churn?  Here’s a roundup of the ten most effective practices today, in both business and consumer markets.  Consider which of these may be the most applicable to your business, your customers and your objectives.  And don’t forget to set aside some budget for ongoing retention and reactivation marketing.  It’s the best money you can spend.

1. Move quickly

The longer a customer is inactive, the more likely an eventual defection.  Early action is arguably the single most effective technique in reactivation marketing.  But, you can take this principal a step further if you examine customer behavior patterns to predict inactivity before it even starts.  For example, if purchase frequency slows, or order size shrinks, inactivity is likely to follow.  Analyze the characteristics of your purchase cycle.  Anomalies in a particular customer’s behavior may indicate a problem that, with early intervention, can be addressed.

2. Segment your dormant customers, and treat them differently

As marketers well know, different customers have different needs, and represent different levels of value to the firm.  Applying segmentation is a key success factor in the reactivation effort, just as it is elsewhere in marketing.  Consider such segmentation variables as:

• Original acquisition source media, like email, SEM, direct mail, display advertising, event, or telemarketing

• Channel usage. This can be communications channels like email or telephone.  Or it can be purchase channel preferences, like retail store, tablet, mobile, or desktop computer

• Product usage

• Customer value, using indicators like RFM, cumulative margins, or intent signals

• Inactivity length, typically divided by months or years, depending on the purchase cycle in your business

3. Deepen your understanding of the dormant customer

There are a number of approaches you can take, among them:

a) Analyze behavioral patterns, looking for insights.  For example, you may notice that an unusually large order is followed by a period of inactivity, and hypothesize that the customer is not getting ready to leave—she just has all the product she needs for a while.

b) Use data append to gather more information about the customer.  Your database marketing partner can add data points to your customer record that will suggest effective reactivation strategies.  Demographic, lifestyle and attitudinal data are especially revealing.

c) Consider some research, using an outbound telephone call, or a focus group, to gain additional insights into the reasons for the inactivity.

4. Communicate through different channels

Thanks to marketing automation, email communications have become very easy to deploy, and there’s no question that email is effective for current customer communications.  But relying entirely on email may annoy lapsed customers, not to mention leave you exposed to possible spam traps.  So don’t forget the other options available—telephone, postal mail, mobile, retargeted display advertising, social media, your website—and add them to the mix to broaden your reach and keep your customers interested in your messaging.  If your customer records are incomplete, ask your database marketing partner to append additional elements to allow communications through these other channels.

5. Use proven offers

Once you’ve determined that the inactivity is not a customer service problem, then the essential tool for reactivation is a motivational offer.  Discounts are widely used by marketers today—because they work.  But consider additional offers that have proven to be effective in reactivation marketing, such as:

a) Upgrades.  If they last bought an ordinary product, offer them a superior version.

b) Special service levels.  Invite them into a special class of customers.  Status and privilege go a long way to attracting a lapsed customer.

c) Affinity products.  Cross offer a product related to a prior purchase.  A carrying case for that laptop, for example.

d) Lifecycle stage.  Look at where the customer is on the lifecycle continuum.  A new customer will respond to a different offer than one that attracts a longstanding customer.  A birthday or anniversary message works wonders.

6. Optimize your reactivation program with testing

Testing can be applied at many points to improve results.  Split-test new offer ideas.  Test creative, personalization, the cadence of your touches, timing, media channel, as well as refinements like email subject line and from line.  Once the customer is reactivated, test to find the optimal the cadence and frequency of ongoing communications that will keep them engaged.  In short, without testing, you’ll never know the full potential of your reactivation effort.

7. Clean up your data.

Consumer and business data degrades fast.  A maniacal focus on data hygiene will pay off in all areas of customer management, especially in retention and reactivation.  If your customer’s email address has changed, you need to keep up.  In fact, in some cases an address change may underlie the apparent inactivity in the first place.  Your database marketing partner can help you keep your customer records up to date.  Quarterly refresh is recommended.

8. Focus your messaging on winback

The most effective creative strategy for reactivation campaigns is to be direct.  Use messages like "We miss you" and "We want you back" in the subject line, on the outer envelope, or in the headline.  Promote your offer prominently.  Enhance your message with a sense of urgency, to motivate quick action.  Examples: Act now.  Limited time.  Last chance.

9. Make it easy to respond

Anything that’s in your customer’s way will reduce response.  Look for ways you can remove obstacles.  For example, eliminate the number of clicks required.  Pre-populate the webform with the customer’s information.  Provide the user name and password in case they’ve forgotten it.  In short, streamline the process end to end.

10. Convert customers to auto-renewal and negative option

One of the most effective methods to prevent churn is to eliminate the repurchase decision entirely.  For frequently purchased products, consider offering an automatic replenishment program.  Subscription businesses can add auto-renewal to their offers, either at enrollment or as an upsell.