Why You Need to Focus On Customer Reactivation for Better Sales
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In today’s ultra-competitive market, every customer matters.
Marketers are putting a lot of effort into generating new leads for their businesses, setting up the right nurturing sequences and eventually hoping to convert those leads into paying customers.
If it sounds like a long and expensive journey, that’s because it is.
Add the extra pressure from having to compete for the customers’ attention on a number of different channels, and you’ll understand why customer acquisition has become such an important metric in measuring a company’s success.
But acquiring new customers is only half the job. For a business to really thrive, it needs to figure out a way to win and retain customers to build a loyal customer base.
Interestingly, there is one aspect of the optimized customer journey that consistently gets overlooked by marketers and business owners, and that is customer reactivation.
Think about it: your inactive customers have already been converted. They already bought from you. You know their purchase preferences and shopping habits. If you’ve asked for important information in your exit-intent popup, for example, you also know the best way to reach them and have some data about them.
But if you’re not using this opportunity to reach out to them, you’re simply leaving money on the table.
Here’s a practical strategy on how to reactivate your sleeping customers and boost your sales—starting today.
Customer Reactivation Marketing Pays Off
One of the most fundamental lessons that modern businesses struggle to grasp is that acquiring a new customer is at least five times more expensive than retaining an existing one.
Once you get your head around this idea and start taking deliberate actions to reactivate your inactive customers, you’ll begin to see immediate results.
Seeing that on average 20-25% of all your clients are inactive, re-engaging even a fraction of them could have a significant impact on your bottom line. Especially knowing that you have some of the key information, such as their email address and buying preferences, at your fingertips.
The probability of selling to an existing customer is 60-70%, while the probability of selling to a new customer is only 5-20%.
That is quite a big difference. It’s easy to see that pouring time and energy into winning back inactive customers would pay off faster and on a bigger scale. So how should you go about it?
While we live in an omnichannel world and there are various ways you could try to re-engage your sleeping customers, most marketers agree that email is still the best option.
Reach out to your inactive customers via email
Since email marketing is the most effective tactic in reactivating dormant customers, here’s what you should keep in mind when building your customer reactivation campaigns:
1. Identify your inactive customers
It may sound obvious, but customer reactivation can be tricky. Reactivation strategies focus on winning back customers whose business you’ve lost and typically, they’ve only bought something from you once.
Besides that, there are no other widely agreed criteria for recognizing inactive customers. How quickly and accurately a marketer identifies these dormant customers and their inactivity window will depend on their experience and skills.
The key success factor in the reactivation effort is to use customer segmentation.
Probably the most important segmentation variable is the time frame you decide to target:
Are you going to reach out to customers who bought from you a month ago? Three months ago? Or are you going to target customers who opened and clicked on one of your emails within the last 12 months?
Any of these tactics could prove to be effective—you just need to keep in mind that different customers are at different stages in their buying journey and have different needs.
2. Define your goals for each segment
Now that you have segmented your inactive customers into different groups based on their inactivity window, you can decide the angle you’re going to take with each reactivation campaign.
For example, the win-back rate for customers who’ve been dormant for the past 12 months or longer is going to be low. If they still remember your brand and had a good overall experience in the past, only a limited-time offer or a special discount could capture their attention.
Clearly stating the purpose for why you’re contacting these dormant customers will give you a better chance at bringing them back. The most popular reactivation methods include:
- Offering discount codes on similar products they bought in the past.
- Inviting customers to update or change their email preferences.
- Sharing relevant updates.
- Sending lifecycle messages that are triggered by certain actions, events or dates — for instance, if they bought a seasonal gift from you last year, it’s very likely they might do the same this year.
Some of these emails could be automated, ensuring your reactivation efforts are consistent throughout the year and require as little of your time and energy as possible.
Once set up, the automated customer reactivation workflows will need only slight tweaks and adjustments, allowing you to focus on other important areas, such as customer retention.
3. Test and fine-tune your campaigns
Inactive customers have a low tolerance for errors. Failing to use the right triggers, or not making compelling offers will almost always lead to a disappointing win-back rate.
While it’s certainly a good idea to leverage automated workflows, bear in mind that you need to monitor their performance and fine-tune the offering to hit optimal results.
Best practices for crafting effective reactivation emails
Through rigorous testing and experimentation, marketers have uncovered several techniques that improve the open and click-through rates of reactivation emails.
Here’s what you need to remember when working on your email copy:
- Your subject line is the first thing your recipients see. If it doesn’t pique their curiosity or trigger some other emotion, your email will go unopened. Some marketing studies have found that using “We miss you” or “Come back” in the subject line can boost the open rate by almost 13%. Take your time to craft compelling subject lines to increase your chances of success!
- Return Path have discovered that customers prefer to see discounts expressed in dollars rather than percentage. You’d be better off including “Pocket $20 in rewards” than “Get your 20% discount”.
- Astonishingly, Experian found that combining a phrase such as “Come back” and “$ discount” is the single most effective tactic often associated with up to 66% growth in revenue. Next time you’re writing a subject line, squeeze in the “Come back to bag your $20 reward” for top results.
- Capitalize on personalization. Keep it breezy and informal when reaching out to your dormant customers. It’s always recommended to include details on past purchases, refer to them by name and mention any other relevant topics that could help you establish a stronger emotional connection.
- Studies show that one email is good, but a reactivation series of three emails is much better (and more effective). Make sure your message doesn’t get buried in your recipient’s inbox by setting up a couple of follow-ups.
Ignoring inactive customers is an expensive mistake. Roll up your sleeves and start building reactivation campaigns to win back the people who’ve already done business with you.
If you’ve done it once, surely you can do it again!
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