Commentary
Reactivation: How To Win Back Customers
- by David Baker , Op-Ed Contributor, November 17, 2014
Outside of new customer acquisition, reactivating customers can be the most frustrating and expensive exercise you ever take on, also providing some of the worst performance metrics you’ll ever
see. While there’s been hundreds of articles written on the topic, here’s my slightly different take that hopefully will expand how …
I almost always agree with David's articulate take on things but, while many of his recommendations here hold water, I'm hard-pressed to buy into any argument that reactivating a customer provides some of the worst performance metrics you'll ever see.
Based on the work FreshAddress performs for 25% of the Fortune 100 companies as well as for over 1,000 leading marketers and nonprofits, reactivating a former customer or donor costs substantially less and yields significantly higher returns than acquiring a new customer.
The problem with most reactivation programs, however, is that companies develop interesting programs with attractive promotions - yes, money does talk - but then email their inactives at old, dead addresses that no one is reading anymore.
Approximately 30% of an email list goes stale on an annual basis, and most of your customers/donors do not update their accounts with you when they change their email addresses. Accordingly, a successful reactivation program needs to incorporate an Email Change of Address service to ensure that the creative and offers you're sending are reaching people at their preferred email addresses, rather than simply falling on deaf ears.
To learn how to further optimize your email reactivation programs, see http://www.freshaddress.com/services/email-change-of-address-ecoa/
How insensitive of me Bill. Your comments are well put after I re-read this... While 700 words allows for an opinion, rarely does it offer the opportunity to share the full view on a subject . I, in no way am saying Don't do this, and no way saying it doesn't perform and add value and I highly recommend you talk to data experts like Bill who's been driving these programs for as long as I can remember.
My point is, don't expect the same results, I've had too many experiences where my optimism hasn't lived up to expectations. and don't think this is a replacement for acquisition, your media will still reach this audience and your full loaded cost will be higher. But ECOA is only part of the answer as is email in general.
So, lets split the difference, since I think we collectively have about 25-30 years experience, and say, just set realistic expectations if you plan to run these programs and it would be wise to ask some of the data experts like Fresh Address and of course Acxiom for expected benchmarks. There are enough benchmarks out there to guide your particular industry story.
Thanks for the comments Bill!
Whoa, whoa, whoa fellas...all good points, but let me take your winback thoughts and add in carving out a path to get there. To me, this is all about using historical response probability analysis (with whatever engagement KPI's: CT, CTOR, opens) and mapping it back to purchase or other conversion funnels. Get an understanding of the key drop off points for email engagement (preferably weeks) post purchase or subscription to the program and create automated intervention triggers and test into things like timing, discounts and even channel integration. Automating intervention triggers affords organizations the ability to do endless testing because you know when the subscriber typically starts to fall out of the program. Plus...if you want to geek out you can do it by the top acquisition sources.
Don’t just take customers for the sake of having more customers. Focus on delivering on your brand promise and nurturing your customer experience. Only make adjustments that will further those two elements and make a positive impact on your bottom line.