Lapsed customers — or those who haven’t made a purchase in so long that they can no longer be considered active — tend to get written off by most companies and categorized as an unfortunate inevitability in the world of business. And in many cases, their loss is in fact inevitable. But not all lapsed customers have to remain lapsed. Many can be won back.
The truth is, lapsed customers remain an underappreciated segment for many businesses — not to mention a lucrative one, too. Whether they stopped returning because they had a negative experience, they switched to a competitor, or they’re simply no longer in the market, there’s always a way to re-engage lapsed customers and convert them back into active ones.
Below are a few ways marketers utilize today’s technological tools to help build loyalty and reactivate lapsed customers.
Calculate How Much they’re Worth to You
Rewards and discounts have been part of the marketing playbook since it was a rough draft. What’s new is the ability to accurately calculate ROI. With today’s data analytics and BI tools, marketers can figure out exactly how much it’s worth to bring back a formerly high-value user, and subsequently offer them a discount or promotion in order to win back their business.
For example, if you find that reactivated customers have a value of, say, 25% of what their original value was before they left, then you can predict how much each lapsed customer is worth. In this scenario, if they once spent $100 with you, you can offer them a gift card or discount up to $25, and still come out profitable on your campaign.
Segment Customers Based on their History
Today’s segmentation tools enable marketers to deliver targeted messages based on individual customer’s previous shopping history and preferences. One common method of segmentation splits customers into groups by how much they’ve spent. This is especially helpful when the marketing team’s time is limited: segmentation of customers who previously spent more than $1,000, for instance, is sure to offer worthwhile returns.
Prior spend isn’t the only worthwhile segment. Segmenting them by purchase history — what products they bought, or which products they added to their shopping carts — is an effective way to convert lapsed customers as well.
Send Personalized, Properly Timed Emails
Despite some reports that email marketing is dead, email is still an extremely effective method for connecting with customers when targeted properly and written convincingly. Maybe that’s why 63% of marketers swear by email campaigns. But an average person receives around 88 emails per day, so marketers need to personalize their messages in order to cut through the clutter, by using historical purchase or browsing data to present offers that consumers will care about.
A series of messages is also better than only sending one, as users are more likely to read subsequent messages after the first email. It’s important to think about the cadence and timing of your emails, however. Don’t send emails too frequently or you’ll run people off. Studies have also shown that sending emails on a regular basis, so users know when to expect them, increases open and conversion rates.
Target them with “Re-engagement” Ads
Another way to re-connect with lapsed customers is to run “re-engagement” or “re-targeting” campaigns through your favorite ad network. These types of ads use pixel tracking to target users who once visited your web site, followed you on social media, or otherwise engaged with your brand. Reaching lapsed customers with targeted, relevant advertising on third-party web sites and mobile applications is a great way to bring them back to your own properties.
Reach them on their Phones Through Push Notifications
For marketers with mobile apps, push notifications are another powerful channel to reach lapsed customers. Push allows you to deliver a message directly to a mobile device’s home screen, even if the owner hasn’t opened the app for months. After the user opens the notification, deep linking can even take them directly to a specific page within your app for a deeper and more relevant experience.
Around half of all smartphone users view push as helpful. For the other half, push isn’t necessarily an imposition: it simply needs to feel personalized. For instance, a “Still traveling to South Korea? Check out these budget-saving hostel deals!” from a travel app tells the user that they haven’t been forgotten. If they’re not interested, it is still easy to swipe away or ignore the message altogether. And since push is also becoming available on websites, its uses are likely to multiply in the future.
No one is saying that reactivating lapsed customers is easy. It takes a data-driven, strategic approach and the necessary tools and resources to execute it properly. But the good news is, those tools are available as SaaS solutions or off-the-shelf products, and they’re getting both cheaper and more powerful every day. Working with marketing automation and BI tools from many of today’s leading mar-tech vendors means businesses now have access to targeting, segmentation and delivery functions that make reactivating lapsed customers much easier than it used to be.
And besides — it’s a whole lot cheaper and easier than user acquisition.