Customer retention is the most important investment any business can make. That’s because the cost of acquiring new business is five times higher than that of maintaining an existing customer. Once you’ve gone to the trouble (and cost) of gaining a new customer, you’re going to want to hold onto them for dear life.
However, even the best-laid retention strategies aren’t 100% fool-proof. Sometimes customers slip away and stop responding to prompts from you. When this happens, it’s important to be proactive in your attempt to win them back. Since their dormancy could be for any number of reasons, it’s essential to figure out why they left and what they need from your brand.
When you know what they need, you can start targeted marketing campaigns to turn each of those dormant customers active again. Here are the five steps you need to follow to do it.
Step 1: Identify Your Dormant Customers
Every business is different. Some businesses expect a regular customer to make a purchase every day, while others only expect customers to return once every year. Regardless of your store’s average purchase frequency, you should know when your average customer is likely to shop again.
With this information at your disposal, it becomes a lot easier to start segmenting customers based on their behavior and purchase patterns. For example, a London-based minicab provider called Minicabuster noticed that they had a segment of loyal customers who had ordered more than 10 rides but hadn't interacted with the company for over a month. Based on how frequently these customers had ordered rides before, it’s clear that these customers had gone dormant and needed to be targeted specifically.
Knowing when a customer has dropped off the radar is critical if you want to re-engage them. If you don’t have this simple first step established, then you won’t be able to take subsequent steps to bring back their business!
Step 2: Start a Rewards Program
If there’s one thing that will jumpstart your reactivation campaign it’s a rewards program. Reward programs are a well-known and well-received way to retain customers. In fact, almost 75 percent of consumers would prefer to purchase from a brand that offers a loyalty program!
A rewards program is an incredible tool to have in your toolkit because it can encourage customers to both make their first purchase and come back and buy with you again. This is especially true when you keep your program simple and introduce features like VIP tiers and progress bars.
These gamified elements, combined with an easy signup process, make your program more appealing. If you want customers to get engaged with your rewards program, make the whole experience frictionless and fun! That enjoyable experience is what will turn them from a dormant customer to an active one -- especially if your use it to offer them even more value. Bonus points campaigns are a highly effective way to get customers excited to re-engage with your program, and also help drive additional sales and site traffic.
Each of these features will make your rewards program more dynamic and valuable, establishing a switching cost that customers simply can’t resist. This desire will bring them back to your store more often and keep them from becoming dormant customers.
Step 3: Offer an Incentive for Sharing Feedback
One of the best ways to reactivate a dormant customer is to simply ask why they left. Maybe their needs or habits have changed and you just don’t know the details of their new situation. Without asking the question, you’ll only be able to make assumptions which is not what you should base your business decisions on.
A customer feedback survey is a great way to get feedback from your shoppers, but the trick is getting them to fill it out. You can leverage your rewards program by offering your customers an incentive to fill out the survey.
With this approach, you kill two birds with one stone. While the discount itself might be enough to woo them back, if they do actually take the time to fill out the survey you get to discover what they’re looking for. This will give you the ammo you need to market to them better in the future so that they don’t disappear again.
4. Engage Customers Through Mobile
Year after year, customers are spending more time on mobile devices. 77% of Americans currently own a smartphone, and that number can only be expected to grow. As a result, mobile commerce continues to grow -- a phenomenon that’s keeping more customers on their phones at every stage in the buyer’s journey.
This makes mobile re-engagement a key part of your reactivation strategy. Reaching out to customers through a channel that they are conditioned to respond to can be the strategy you need to bring them back on board.
In an effort to put this into practice, more businesses have been expanding their marketing focus to include social media, mobile messengers and SMS, and branded apps to engage customers on the device of their choice.
These channels make it easier for you to connect with your dormant customers through messages, but only if your store is optimized for mobile! A poor mobile experience won’t win your dormant customers back, so take the time to make sure your website loads quickly and is easy to scroll through. Use shortened forms and allow for autofill to make it faster and more convenient for customers to engage with you.
You should also consider how customers can engage with your rewards program on their mobile device. As a key part of your reactivation strategy, you want to make sure that your rewards experience is, well, rewarding -- no matter where customers are engaging with it! Working with a platform that offers an equally beautiful desktop and mobile experience can tip the scales in your favor and get your dormant customers excited about your brand.
Step 5: Offer Text-Exclusive Discounts
You can take your mobile marketing even further by leveraging text messages as the final step in your reactivation strategy. Text messaging is an ideal avenue for delivering personal offers tailored to the needs of a particular group of customers.
The key to this reactivation strategy is preparation. Just like it’s important to be able to identify and group your dormant customers, you need to pre-plan your SMS marketing campaigns and schedule text messages so that you can reach your customers at the most appropriate time. Similarly, make sure you’ve collected text opt-ins so that you can send limited promotions to that mobile list later.
You can improve the odds of a dormant customer revisiting your site by making them feel like a VIP. Offering them a discount that’s not available to all customers will make them feel as if it was designed especially for them, making them feel valued. This type of small touch will go a long way towards making your least engaged customers remember how much they loved your store in the first place.
Tell Them You Want Them Back
At the end of the day, the best way to get dormant customers to come back to your site is to just come out and say it: “We miss you!” or “We want you back!” Let your dormant customers know that you noticed that they haven’t been engaging much lately and that you’re eager to win their business back.
JetBlue’s customer come back message is a winner with their tagline “Breaking Up is Hard to Do”. Their message acknowledges that customers might get a little overwhelmed by marketers from time to time, but that they truly appreciate each customer’s business.
Smart businesses go after their hard-won customers with special discounts, win-back messages, polls to let them know their customer’s needs, mobile engagement, and other methods.
Don’t let your customers slip away - get them buying again by starting on these steps today!
This guest post was written by Tracy Blanchard, business writer and editor at TextMagic. Tracy is serious about self-development and believes no business can succeed without a team that constantly learns and grows.