How to Keep Reactivated Customers Loyal and Engaged
Several weeks ago, we addressed the topic of preventing customer churn and discussed some strategies both for prediction and prevention of customer attrition. However, even with an effective retention strategy in place, a certain portion of customers will churn. It’s part of the nature of doing business. Those customers are perhaps now shopping with a competitor, or their needs have changed, or their priorities shifted — there are a whole host of reasons for churn. Therefore, it is important to understand how to keep reactivated customers loyal and engaged.
This means that there are possibly tens, or hundreds of thousands, or even millions of customers sitting quietly in your lost customer bucket. That’s the bad news. The good news is that they are not gone forever! With the proper data and retention strategy you can win them back and keep them loyal, engaged, and increase their lifetime value (LTV), as well.
Customers who have been reactivated are a unique segment — First, they have shown past affinity for your company or products, have recently chosen to reengage with you, AND you have historical data on their purchase patterns, behavior, demographic characteristics, and other attributes. On the other hand, they have decided at one point to stop doing business with you, and they have much in common with brand new customers. For both of those reasons they need to be carefully nurtured to become regular customers again.
This sub group of customers can be hugely valuable for businesses, and are often an untapped goldmine as many companies ignore them or lump them in with other customers. However, savvy marketers realize that reactivated buyers must be treated as a unique segment. By understanding their historical data, more of them can be happily brought back into the customer fold.
Looking at the data
The first step in successfully nurturing customers back from churn is to do a deeper dive into the available data. Once this is done, you’ll see that not all reactivated customers are created equal. There are several factors that must be taken into account to better understand them, and build out “micro” segments of reactivated buyers. This will not only help identify what these customers have done in the past and what they may do in the future, but will also tell you which offers via which channels are the key to long term loyalty.
Some examples of data that should be examined during this process are how much they spent when they were a customer (were they frequent, high value shoppers, or seasonal discount hunters?), how they reactivated (did they come back after receiving some sort of free shipping or 20% discount offer from you, or did they find their way back on their own? The difference can be huge to the likelihood of continued engagement!)
Other data points to take into account are demographic (is this a man in his 30s from Chicago, or a woman in her twenties from San Francisco? Again, the differences can be dramatic). Also important to know is how many times this customer has churned in the past…In other words, is this the very first time this lapsed customer has returned? How does that compare with customers who have come and gone multiple times over the same period? Again, understanding these differences between the various types of reactivated customers will help inform the marketer about what is needed to keep them engaged with your brand.
You’ve studied the data…now what?
Now that you’re churned customers are back home again and you’ve reviewed the relevant data and further segmented these reactivated shoppers, the real fun begins. Remember, the main purpose of understanding back from churners is to nurture them to become regular, active customers again. To do so, we need to treat them as individually as possible — that’s why their historical data is so valuable. It holds the key to their future engagement and loyalty.
Take for example a customer who has recently reactivated for the first time after receiving a promotion for a deep discount on the one product that they’ve previously purchased with you. This behavior pattern may indicate that they’re cherry-pickers, meaning they only buy when there’s a discount for the products they like. While you may never get them to buy full price, you can allocate your marketing resources effectively by sending discount or promo offers for other products that complement their original purchase. This method can help to increase your wallet share with this customer and can potentially lead to higher engagement and LTV as they eventually purchase multiple products.
Another example could be a customer who reactivated on their own after having previously been a fairly high LTV shopper, but has been inactive for a year. In this case, rather than just targeting the buyer with a promotion for one product, the fact that she was formerly a high level customer may mean she’s ready to engage with your brand once again. Rather than a steep discount right off the bat, perhaps try a series of promotions starting out with some “welcome back” suggested items, and then see how she responds before escalating to a discount.
In either case, the main point to drive home is that the ONLY way to have a chance at keeping reactivated customers loyal and engaged is to understand them as individuals. Today’s marketers must realize that while winning back a lost customer is itself a great achievement, to continue to have them as customers they need to truly understand what caused the churn in the first place, as well as what brought them back.
Only by having clean and fresh data, along with a robust AI driven analytics engine to segment and predict will this vision become a reality. There is too much data that needs to be processed and analyzed too quickly to rely on manual means of analysis. To see ZyloTech’s take on this, please visit our website at www.zylotech.com
Originally published at zylotech.com on August 15, 2017.