What is Customer Reactivation? (+examples)

If you want to discover the awesome possibilities of customer reactivation, you have come to the right place!

That’s because in this article we are going to explain how to reactivate past customers that haven’t bought in a while, and give you helpful examples and proven strategies to help you win back customers.

What is customer reactivation?
Customer reactivation is a form of marketing that engages customers to purchase again. For a variety of reasons, an inactive customer is someone who has not purchased from you in a given time frame, often times 1 year or more. A customer reactivation marketing strategy can (re)inspire a buying decision.

So what exactly is customer reactivation and how do you do it?

That’s exactly what we are going to explore in this article.

Let’s get started!

What Does Reactivation Mean?

Dictionary.com defines reactivation as; “bring back,” “induce,” and “reawaken.” 

In a business sense, this action aims at winning back the loyalty of someone who used to be a customer.

But what does reactivation really mean?

Reactivation means you are re-engaging a customer who has not made a purchase in a while to come back to your place of business, your store, your website or wherever you conduct transactions.

In most cases, this means you want to reactivate a buying habit with this customer, to come back to doing business with you.

For example, maybe you own a restaurant and the customer saw other people who were seated long afterwards but still received their food before the customer who was seated first.

This upset the customer and they decided not to come back.

  • Or they saw their food sitting on the chef’s countertop waiting to be delivered while the wait staff was chatting amongst themselves.
  • Or, they were simply too busy to deliver the food while it was getting cold.

Again, this upset the customer and they decided not to come back.

For a very insightful, fairly famous article on this topic, you are encouraged to visit:

I’m the Nice Customer … Who is Never Coming Back …

Anyway, whatever the reason, and regardless of the typical and sometimes unique buying cycle that is unique to your industry, the customer once was a regular buyer, and now hasn’t returned in a given time frame.

This means the customer has become inactive and your business needs to implement a customer reactivation strategy.

As we go deeper into how to fix this, it is worth your time to review why customers become inactive as outlined in this helpful article:

6 Reasons Why Customers Stop Buying

What Is Reactivation in Business?

In business, customer reactivation focuses on nudging dormant customers to resume product or service purchases. 

Sounds like a simple marketing campaign, doesn’t it?

Well, it's not always easy.

Remember, each customer has a different reason for why they have not come back. Maybe they are upset with your service, maybe a bad product, maybe they have no money left, they may have found a better deal elsewhere or maybe they moved.

For optimal conversion rates, your customer reactivation strategies should take a somewhat personalized approach. And sometimes this takes time to find the right message.

Fortunately, and depending upon the size of inactive customers, there are many wonderful technologies available to you today that can help.

Generally, the most popular customer reactivation strategies use at least 1 of these  forms of communication:

  • Email marketing
  • Telephone marketing
  • Direct mail
  • Face to face
  • Video and Webcasts

But how do you choose which form of marketing communication to use?

As a general rule, and for highest conversion rates, use the communication that the customer is most comfortable using.

  • That is, if they prefer to communicate with email, use email for your reactivation campaign.
  • If they found you from a print ad or direct mail, use direct mail for your reactivation campaign.
  • If they walked into your store, figure out how to see them face-to-face.
  • Or, if they called you to become a customer, use the telephone for your reactivation campaign.

This is where modern marketing tools are tremendously helpful. For a growing list of some of the best marketing tools every marketing pro should be aware of, visit:

What Are the Best Marketing Tools?

One of the first tools that will be your go-to for this strategy is a simple Excel or Google Sheets document to review your customer data.

At this phase, it is extremely helpful if you have reviewed this tutorial:

Recency, frequency, money | RFM analysis

The purpose of the RFM analysis is to properly segment your customer list.

And that is what this first business analytics and marketing metrics lesson is all about.

First, identify all your inactive customers

Assuming you have a customer list, here’s a very simple way to start. Here’s what you do:

  1. Download all your customer records into an excel file, with each customer being its own unique line item (avoid having multiple transactions for the same customers counted as different line items)
  2. Sort the columns by last purchase date, most recent at the top
  3. Highlight the customers that have not made a purchase in 12 months
  4. Copy and paste all the customers that have not purchased in the last 12 months into a different excel table
  5. Label these as your inactive customers and they will be the focus of your reactivation marketing campaign, as well as the examples below

If you do not have a customer list as is the case with many brick ‘n mortar businesses and retail shops, you need to start one immediately. In the meantime, you can still use the core message in this article to win back customers with a little creativity.

To make this far, far easier on yourself, it is highly suggested that you first clean up your customer list.

Here is a suggestion on how to do this.

Create 4 segments for your customer list to make your customer reactivation strategy easier

Here is a starting point and how you should manage your customer list at all times. It is normal to update your regularly. At a minimum, update your list once a month or once a quarter, if it's not already automated as a result of your eCommerce solution or CRM.

Break your customer list into these 4 segments:

  1. Make a list of all customers and call it your “House list”
  2. Make a list of all your current customers
  3. Make a list of all your past customers (these are your inactive customers) who have not ordered (according to your general sales cycle)
  4. Make a list of non buyers in your list

This is a super simple basic structure to help you get started and stay on top of your customer segmentation and reactivation strategy.

Onward.

Let’s now get into some real-world actual examples of customer reactivation marketing campaigns. These are real campaigns that we have recently done so you can model them for your needs.

What Is a Reactivation Campaign Example?

Let’s now run through three simple reactivation campaign examples.

Customer Reactivation Example 1

To start, here is a recent campaign focused purely on customers that have not ordered in over 1 year.

This example is from a very successful online seller in the wellness industry.

Here’s what we did:

  1. We took 2,000 names of old customers who have not purchased in more than 12 months. These were clearly not current buyers because the average customer frequency is 1 transaction per month, and the last transaction date for this group was 12+ months.
  2. Our offer was a special multi-pack bundle discount bringing the price per unit down below standard retail price, but at the same time created a greater than average order value (AOV).
  3. The offer had a clear and urgent deadline because the unit price was so low (to increase the perception of the value).
  4. This was an email campaign. 
  5. The results for this type of campaign vary widely, but in this case the email open rate was about 7.5% (current customer open rates are far higher) and the click thru rates (CTR) about 10% (the quality of the offer and the quality of the list largely dictates the CTR).
  6. We ran this campaign several times and a portion of the 10% of the people that clicked thru to see the offer became an active customer again. Of course, this reactivates customers, creates an immediate and positive ROI, increases sales revenue that we normally would not have had, and gives the company the opportunity to create a raving fan!

For all the details on this customer reactivation campaign and a template for you to follow, you are encouraged to visit this helpful article:

This Common Marketing Mistake Could Be Costing You Millions

Important note: If you are looking to reactivate the most numbers of inactives and increase lead flow in order to fill your sales pipeline, figure out how to use the word “Free” in your offer. For some helpful examples on how to do this, visit:

How is “Free” used in marketing? (5 clever strategies)

Customer Reactivation Example 2

The next customer reactivation campaign example is for a company in the food business. This campaign simply went to all customers who have not purchased in more than 365 days.

We sorted all the customers in the database and found all the people who have not bought in more than 1 year.

This left us with a considerable number because the company does a high volume of lower priced transactions (< $50) in a highly competitive niche.

Here are some basic expectations:

  • Average conversion rates for inactive customers drops significantly.
  • Your best customers are always your most recent customers.  
  • The longer the “Recency” in purchase history, the lower the rates are.
  • When you combine a reactivation strategy to a quality list with a truly great offer, you will reactivate past customers.

Customer Reactivation Example 3

Let’s do one last example for a service-based model with far less numbers in the database.

It is very normal for a service-based business to have less than 1,000 customers in the database. This is especially true for larger price points, “high frequency” of service and if the business has less than 5 years of history.

So, the customer database for a service-based business model may break down like this: 

  • House list = 1,000
  • Current customers = 50
  • Past customers = 550
  • Non buyers = 400

So, your customer reactivation strategy will focus on the 550 past customers who have not purchased recently. 

Because 550 is a lot to manage for a company that is probably a small service-based business, you would want to carefully review the list to define your reactivation strategy.

You will want to segment this list into the most recent buyers (1-2 years, 2-3 years, etc), buyers who spent the most money with you, and buyers who did the most transactions with you.

In this case, it makes sense to do a combination of phone, email and direct mail.

For example, here a real world, sample customer reactivation marketing plan:

  • The buyers who spent the most money with you deserve a phone call.
  • The buyers who did the most transactions but did not spend as much get a direct mail package, and 
  • The buyers who have not purchased in 3 or more years get an email series. 
  • Take careful measurements of each campaign and see which performed the best.

If you run a landscaping business you could visit the old addresses with some marketing materials and a media kit and (re)build some rapport. They may be different people that live there as your past customer may have moved, but this represents a wonderful bridge to re-activate a relationship or create a new one.  

Additionally, you could call the most recent past buyers and tell them you’d love to do a free consultation to review their property to see if there are any maintenance issues that need to be taken care of.

These two strategies are extremely easy and can be used in basically every service- based model.

These are just simple strategies to get you thinking. But this is what works and our marketers do every day.

In fact, if you are looking for a fantastic career opportunity you could literally make a wonderful career out of specializing in developing customer reactivation strategies. For more information on exactly how to do this and more, you are encouraged to go here.

.
Categories:

READ THIS NEXT...

Building a Marketing Department for a Manufacturing Company (10 step guide)

Traditionally, many manufacturing companies relied on word-of-mouth referrals. Today, if you run such a business, you can no longer rely […]

Read More »

Your Strategic Marketing Partner Reveals

Your Strategic Marketing Partner Reveals … How to Use Your ‘Big Data’ to Grow Sales, Find Hungry Buyers and Slash […]

Read More »

How Do Beginners Do Marketing?

As a beginning marketer, it’s important that you choose the most convenient and low cost methods to promote your products […]

Read More »