Did you know that 65% of a company's business comes from existing customers? So why are you pouring all your efforts into attracting the 35% who have not bought from you before?
In this guide, we discuss the importance of re-engaging inactive customers and how to use win-back email campaigns to convert them back to active ones.
Why do customers shift from active to inactive?
Losing customers is frustrating and every marketer spends a good chunk of their time considering all the reasons that a customer might jump ship. There are many common reasons this might be the case, including:
Change in interests: their purchase was based on a seasonal trend.
Dissatisfaction: they were unhappy with your service or products.
Flash sale purchase: they only bought because the products and services were discounted.
One-time purchase: their needs have since been met.
Cluttered inboxes: they have cluttered inboxes so are not receiving your emails.
So, what should you do with these dormant customers? You have two choices: discard or re-engage. For the most part, it is best practice to re-engage customers. It's the way you re-engage those customers that really matters (more on that to come).
Why should you re-engage inactive customers?
Here are 6 reasons you should prioritize winning back inactive customers over acquiring new ones:
1. Acquisition costs more money
While acquiring new customers is critical to growing your business, it often comes at a high cost to your business. Typically, acquisition can be broken down into the following costs:
Outbound (or traditional) marketing such as banner and display ads, pop-ups, TV, and print ads.
Inbound marketing such as blogs, SEO, and social media.
Sales and business development expenses including salaries and commission.
Event marketing strategies, such as trade shows and conferences.
To keep acquisition numbers growing, businesses must keep running these programs and continually inject more money into them.
Despite these efforts, only 5-20% of new prospects typically convert.
Instead of depleting your resources through acquisition, focus your energy on win-back email campaigns that would turn back inactive customers to you. At the end of the day, they have a higher chance of purchasing than new prospects.
2. They are acquainted with your brand
If people don’t know who you are, they won’t purchase your products.
Brand awareness happens the moment a person sees your logo and interacts with your business either through your website, social media platforms or directly visiting your store.
Your inactive customers are already familiar with your brand and product offering, more so than cold leads. For this reason, there’s no need for you to implement lengthy awareness campaigns or comprehensive brand introduction.
These customers already know your value proposition, so winning them back may not be as hard as it seems.
3. They already trust you
Something to be sure of is that customers don’t randomly purchase products from anywhere. In fact, 81% of customers need to trust a brand before buying from it.
Until a prospect becomes a paying customer, they will not put their trust in your brand, at least not in the beginning. But as that prospect flows through your marketing funnel, their trust is strengthened.
Once they become a customer, that trust influences their buying behaviors and increases their loyalty to you. This is why it’s easier for a customer who has already purchased to buy again, rather than one who hasn’t encountered your brand before.
4. They have an established need for your business
Why would you abandon a customer who has previously purchased from your store?
Unlike new visitors, these inactive customers have already demonstrated a need or desire for your products. If this wasn’t the case, they wouldn’t have made the purchase.
Unless their circumstances have dramatically changed, they’re still your ideal target audience. This means that you don’t need to spend a lot of resources to validate a new audience.
In other words, they’ve been engaged at some point before, so you know that they’re warmed up to your brand.
For example, you may have a segment of customers who only made one purchase during a holiday season flash sale. Try winning them back by offering a similar discount and see if they’ll take action.
5. You already have existing data on these customers
Honestly speaking, you have little to no knowledge about your new customers. On the other hand, you already know who your inactive customers are and what they like. You also know their lifetime value, engagement rates, and whether they’ve made any complaints.
This means that you can effectively personalize your win-back email campaigns.
Study all the behavioral data your marketing automation and CRM solutions have on these customers and use that information to win them back.
Users of Ortto’s marketing analytics software are able to predict the customer segments that are most likely to churn or stop buying from your store. Use that milestone to deliver a compelling message to these disengaged contacts and watch them engage with your brand once more.
6. They can help you uncover improvement opportunities
For your business to grow and reach its full potential, you need to identify its flaws and improve on them. Your inactive customers already had a one-on-one experience with you and could help pinpoint improvement areas.
This could be your customer care services, the packaging of your products, delivery services, etc. All you need to do is ask them. Send out an email or a survey asking them to rate your services and to give feedback on their interaction with your brand.
Frye did this well, they went ahead to add a $50 incentive to entice customers to take the survey.
From the answers they provide, you’ll know the areas that need to be worked on.
So, we’ve looked at why you should win back inactive customers, the remaining question is, how? Let’s get into it.
How to win back inactive customers
Now that we’ve seen the value that inactive customers have, there’s no doubt in our minds that bringing them back is far better and easier than acquiring new ones.
But how do you do so? How do you convince someone who left to come back? The solution is simple: coming up with an effective win-back email campaign.
Here are four tips and tricks for creating an effective win-back email campaign.
1. Use humor to get their attention
As much as these customers have cast you aside, you shouldn’t guilt-trip them to coming back. By doing so, you show them that you’re only interested in making sales and not providing value to them. Instead, capture their attention using humor.
This way you can appeal to them on a more personal level, showing your brand has a sense of humor and fun, rather than laying on the hard sell . Check out the example below.
2. Recommend similar products
Since the customer purchased from you before, you should know what kind of products or services interest them. Instead of recommending the same thing to them, recommend one that complements it or show them an assortment of products that other customers pair with their original purchase.
For example, if they purchased puppy food from your store, you could recommend a puppy leash or a feeding bowl for their furry friend.
Or if they purchased gym apparel, recommend some running shoes that other customers who purchased that same apparel have been purchasing and rating highly.
Epic did this when they recommended similar books to what their customer had originally purchased.
3. Let them know what’s changed
Remember how we talked about asking these inactive customers for feedback regarding your brand and what to improve on?
It’s time to put that into action and, once you get the answers, implement them. In addition, tell them about your new products, services, or website features just as Good Eggs did.
4. Offer incentives such as discounts
Incentives entice customers to purchase once more. Pacsun is a great example of a brand that implements this in its win-back email campaigns.
When designing your win-back email campaign, offering discounts should come as one of the last measures, because a customer that comes back just because of a discount is less likely to stick around in the long run.
When all fails, it’s time to let them go
If your customer has yet to open either of the emails above or engaged with your business in any way, it’s time to let them go. As sad as it may be, this is for the best. You’ve tried but they’re no longer interested in your brand and hounding them with more emails is more likely to lead to frustration than purchases.
You can stop sending them emails altogether by putting them in an inactive segment, or send them one final email giving them a chance to make a move — the email from Myles apparel below is a great example of how you can do this with lightness and humor.
Remember that customers who have fallen by the wayside aren’t gone forever. With an effective win-back email campaign, you can return them to the fold much faster, easier, and cheaper than acquiring new customers to replace them.
SaaS providers hold a lot of your business’s sensitive customer data, so it’s crucial that data is protected. We’ve outlined all the security compliances and considerations to look out for when vetting SaaS vendors.
Learn how to build audience segments in Ortto and share them directly with Facebook, Google and Twitter to create lookalike audiences that can be targeted in ads.
“We were looking for a solution that was really easy to use, didn’t require a tech team, and would have a robust integration with Salesforce so we could trigger sales communications in a smarter way. Nobody else out there has what Ortto has.”