Are you looking for the best ways to reactivate dormant customers and reduce churn? Here’s a roundup of the 10 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:
- 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.
- 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.
- 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: