Reactivate Online Customers

To meet goals this holiday season, the ability to send another e-mailing to your house file can be critical. But overmailing to the house file could cause customers to unsubscribe or, worse, to relegate your communications to a junk folder or to mark it as spam.

Keep Customers Who Unsubscribe

To keep customers who unsubscribe from your mailings, provide other options, such as:

• Reduce frequency, such as biweekly or monthly, rather than weekly e-mailings.
• Provide different content alternatives. Customer tastes or needs may change over time. This means having multiple newsletters, dynamic content, or both.
• Allow customers to switch to other communication channels, such as RSS or offline catalogs (if you offer them).

If these steps don’t work, try to get feedback on why the customer is unsubscribing. While the input may not retain customers, it helps you to better serve the remaining file.

When There’s No Customer Response

From a marketer’s perspective, lack of customer activity poses different challenges. It can take one of two forms: no e-mail activity and no purchases.

If e-mail tracking reveals an absence of interaction, the e-mail address may no longer used or communications may go directly to a junk mail folder that’s automatically emptied without being read. Some alternatives:

• Present an attractive offer to get these customers to reengage with you.
• Reduce e-mail frequency in case recipients are away or distracted in the short term.
• Remove the e-mail addresses from your house file. This improves your list’s effectiveness and reduces potential deliverability issues.

If there are no purchases, alternatives include:

• Promote customers at the point where they’re most likely to stop interacting with your firm. This may require a more enticing offer than regular promotions to lure them back. Consider customer purchase frequency.
• Use offline direct mail to win customers back. An experienced direct marketer successfully re-engaged inactive customers of his online-only product by using old-fashioned direct mail to drive former customers online to purchase. His successful campaign was most effective for the customer segments that had most recently stopped purchasing.While this marketer declined to be identified or to share specific results, his findings provide important insights for online marketers, particularly those who only use online methods. In a maturing market where additional sales increasingly come at the expense of competitors, it’s critical to have processes in place to reactivate former customers. These former customers are more cost-effective to contact than new prospects because their e-mail and postal addresses are part of the house file.

As direct mail can be expensive relative to online marketing, consider the following factors:

• Customer lifetime value. Can customers’ lifetime value be extended through direct mail to reengage them?
• Direct mail costs. How do the projected direct mail costs compare to your online acquisition costs? Are your online acquisition costs fully loaded to take into consideration all relevant expenses over time?
• Database health. Can your existing database and systems track the relevant activity and provide postal addresses for customers that have no recent activity?
• Other marketing media used. What other media formats are you using to build your brand and drive online revenues? Do some of these build brand rather than sales? If so, using direct mail may help reduce additional brand marketing investment.
• Competitive activity. What are your competitors doing to retain customers? How does their customer base overlap with yours? Are they using offline methods to win back former customers?

Assessing Reactivation Efforts

Key factors to monitor to determine the effectiveness of your reactivation marketing:

• Analyze e-mail lists for non-performing recipients. This allows you to determine how to win back a portion of those users. Tips:
  • Check for nonresponders or inactives as repeat mailings to unknown users both hurts your relationships with ISPs and may cause you to lose other customers. The period of inactivity may vary, based on your offering, from 60 days to 6 months.
  • Look for clues as to when customers stop being interested or purchasing. If the falloff begins after 60 days, start at 30 or 45 days to win them back.
  • Use an e-mail change-of-address service to reconnect with nonresponders who may have changed addresses. Offer this option in your e-mail preference center.

   

• Monitor the volume of e-mail cancellations and unsubscribes. If there’s a spike relative to past experience, analyze your site to determine if an internal or external change may have caused it.
• Track results and costs related to customer win-back efforts. Monitor the number of customers you convert back to purchasers. Assess their response rates and average sale. Calculate relevant costs, including e-mail, postal mail, creative, and database.
• Develop a second customer lifetime value metric. Win-back customers have another lifetime of spending. Track the related sales and referrals to understand how they can grow your business. Since reacquisition cost is usually lower, these customers tend to be more profitable.

While reactivation marketing may not be as sexy as acquisition marketing, the return on investment can be better. Since former customers are familiar with your products and company, this reduces the need for additional branding support. Sometimes, an old customer is your best customer.