Commentary
Reactivation: How To Win Back Customers
- by David Baker , Op-Ed Contributor, November 17, 2014
Timing! The first key to any program’s success is when to do it. Let’s start with when you don’t run these type of programs. I’ve not seen many succeed when they compete with major holiday traffic. There is simply too much noise from the brands you engage with regularly to stand out. However, do run a reactivation email program in concert with your mainstream advertising. We know the recall when there are two or more channels with the same message.
It might be worthwhile to do a bit of analysis on the original conversion source vs. simply dumping it into a common file and working from scratch. There was a reason why customers originally engaged with your brand: A promotion? A time of year? Drill into the source of the customer and that will help you work on reactivation in the context of some historical pattern. Remember, consumers are typically episodic in nature and in a stimulation rich society, most will react similarly to how/what they’d done in the past.
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Money talks! They were a customer or subscriber and are not now. Why? Did you oversaturate them? Did they have a bad experience with your brand? Did you lose them to a competitor? That’s why I actually prefer the term “win back” to “reactivation.” You must “win” them back. You need to get their attention, and money/rewards are the primary driver. We can talk about context and brand messaging, but engagement is a currency you have to pay for. Create something unique for this audience. I’ll give you a hint: A deeper discount won’t incentivize someone who won’t buy from you in the first place. Be creative with rewards, and don’t limit yourself to “your” goods solely as a source of reward.
One channel? Why? This is a multidimensional world with a four-screen consumer paradigm. Why do most think of reactivation with email only? The entire consumer world is mapped, it is owned by bits and pieces of companies. The question you should be asking is, what do I need to know about these people that I don’t know and how much am I willing to spend to engage them? That will define what sources are available to you and how persistent you’ll need to be to win at this.
Quarantine this program, keeping these customers partitioned from your general universe of customers. Two reasons for this: 1. Don’t mess with trends, by spiking them up/down for adhoc bi-annual exercises. Fact is, this is not your typical customer, or a decaying customer, it’s a dormant customer and response variance shouldn’t be introduced into this overall analysis. At the end of the day, you need to justify this program financially -- and it’s not apples to apples with the rest of your customers. 2. They need to be treated differently. Not just messaging, but cadence, and likely channel mix.
Last tip: With all the consortiums and connected data sources, it’s fairly easy to tell if customer A is buying from Brand B, your competitor, or even a complementary brand. This data will definitely help you tell a story of why you should run these programs, how to allocate budget from other channels in concert, and what value they could bring to your company.
Be creative and challenge yourself to do more. As the poet T.S Eliot said, “If you aren’t in over your head, how do you know how tall you are?”
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.