5 Ways to Win Back Lapsed Customers With Email
In any direct marketing business, it's a foundational problem when previous buyers stop engaging with the retailer or brand. Sometimes referred to as the "leaky bucket" problem in direct marketing, customer attrition impacts all areas of the business. It impairs the overall value of the housefile, for example, and puts added pressure on customer acquisition. Lapsed customers for email programs are no different.
Here are five strategies for engaging and reactivating lapsed customers:
1. Define lapsed customers. One mistake email marketers often make is not creating rules that define lapsed customers. You don't just want to let attrition happen without recognizing and dealing with it quickly. Different businesses have different definitions. Even within a business, different rules or definitions may apply.
For example, email accounts from lead generation programs that generate triggered emails might be considered lapsed with no response or interaction after the initial 30-day or 60-day contact stream. At the same time, someone who's been a good customer and purchased for several years may not be considered a lapsed customer after months of unopened emails.
2. Track and report performance. Once you define lapsed customers, you want to gain as much visibility and measurement into their performances as possible. In addition to tracking and reporting the typical email metrics — deliverability, contacts, opens, clickthroughs, orders, sales value, etc. — you also want to measure reactivation rates and even lifetime values of reactivated customers. This helps you not only understand the potential values of these names, but also the impact of various strategies and tactics that were deployed.
3. Segment your lapsed customers list, and target messages appropriately. As described above, there are different profiles of lapsed customers. Some are long-term customers, while others are new prospects who never converted. Some have been lapsed for years, while others stopped buying or engaging recently. Each of these groups needs to be spoken to differently, with different frequency, through targeted mailings.
4. Vary the "we want you back" messaging, and optimize through testing. There are many ways to say that you want customers to renew their relationships with your brand. Marketers frequently acknowledge that "we haven't heard from you in a while" and then follow it up with a special offer or update on significant new developments since the customer lapsed. It's important to vary and test your messaging to give yourself the best chance of hitting the theme that will drive customers back to you.
5. Stream test contact frequency. Determine the optimal contact frequency of lapsed customers by testing different frequency options. Be careful to measure the impact on reactivation rates versus undeliverable email and other operational metrics.
In summary, there are important ways to reactivate lapsed customers. Given the cost of finding and acquiring new customers today, reactivating lapsed customers may be the best way to grow a profitable housefile. Remember: Define, segment, test and target.