As I’ve discussed in a previous blog on customer retention, it costs five times as much to find a new customer as it does to keep an existing one. So it’s really worth pulling out all the stops to prevent would-be quitters from dropping you once and for all. You may not know exactly why they left – unless you ask them of course – but that doesn’t mean you can’t pull them back in.
The first thing you need to do is decide what lapsed means for your business. A lapsed customer is frequently defined as someone who hasn’t bought for at least 12 months, but your customer lifecycle may be different; if you sell high value items, a longer gap between sales might be perfectly normal.
Once you’ve defined what lapsed means, you need to do some smart segmenting. Look at the recency, frequency and monetary value of these customers’ previous orders, and work out their lifetime value; then use this to segment them into groups.
You can then use this knowledge to target your offers and messaging. For example, it would clearly be worth investing more into a customer who has bought a piece of furniture every year for six years than someone who popped by your site once, bought a lamp and was never seen again.
You’re going to need to work harder to win this lot over than you would with current customers. So make your email both smart and appealing. Use their previous purchase data to help you select products they might be interested in, and showcase them. If they’ve been browsing on your site but not buying, include what they’ve looked at. And if they haven’t been to your site for a while, showing them what they’re missing is the perfect hook.
It might be tempting to think that you should try once, then leave them be. But don’t! These customers are still easier to re-engage than a new customer would be. So plan a campaign, and make it relevant and appealing; that way you’re being helpful, not a hassler.
It’s also worth remembering that emails might indirectly re-engage them with your brand. According to Return Path, 45% of people who received a win-back email went on to read subsequent emails from the same company. So no reply doesn’t necessarily mean no response.
You will eventually decide to stop – or to ask them if they still want to opt in – and your customer lifecycle data will help you decide when that should be.
Incentives, recommendations, timing, number of emails… there are so many things to test with win-back, and it’s surprising what a difference even small changes can make.
For example, Return Path’s research showed that a subject line with a discount expressed in cash terms was twice as effective as one with the discount expressed as a percentage. Similarly, whatever conventional wisdom says, don’t assume that your high value customers need a high value incentive – it may be that free delivery is what floats their boat. So test, test and test again – and refine your subsequent activity based on what you’ve learnt.
You can read more about CLM in general, including cart abandonment emails, in our Convert, keep, grow e-book. And look out for my next CLM blog, which will fill you in on how to turn browsers into buyers.