Stepping into a new year always brings reflections on the past year and a determination to make good changes or improvements in our lives and our businesses. How did we do? Where can we improve? What do we want to accomplish this next year?
Many of you have expressed that a goal for next year is to grow your customer base and one area that could and should be considered is reactivating Lost Customers (past customers who are no longer ordering).
Why did they stop ordering? How long has it been since they last ordered? How do I encourage them to start ordering again? Research shows it costs five times more to attract a new customer than it does to keep an existing one, even if the customer has strayed for a few months. So what can we do to re-attract lost customers?
First, determine how many past customers are no longer ordering and how long it has been since their last order. If known, note why they stopped ordering (family grown and gone, less money to spend, unhappy with product or services, unknown). Then, based on time and finances available, decide which type of offer to try and how many past customers you will make the offer to.
1. The Bundle Offer
One of the best ways to encourage past customers to order again is to make them an offer they can’t refuse. A marketing professor at Georgia State University, V. Kumar, conducted a study to see what kind of offer wins the most customers back and found that a “bundle of freebies” is the best way to go. (https://hbr.org/2016/03/winning-back-lost-customers)
Consider offering customers two freebies, like a discount and a free gift. Offering a single incentive was effective, but not as effective as the bundle, according to Kumar’s results.
Be very specific with your promotional offer so there aren’t any misunderstandings and your past customers know exactly what they need to do to qualify.
EXAMPLE offer: I/We Miss You! Get FREE Shipping, plus a free gift, when you place an order of $50 or more on Catalog #1. *
*The offer states what they will receive when they order, how to qualify for it, and when it is valid. Setting an expiration on the offer generates excitement. If they don’t take advantage of the offer NOW, it won’t be available later. It also helps you to see how effective the offer is so you can try it again with another group of lost customers or if you need to offer something different to get past customers to start ordering again. The FREE gift can be anything you choose, something that would compliment what they order, or you could let them choose their own gift up to a certain $ value.
2. The Cool Perks Offer
Create a promotion that offers a cool perk or experience. The idea is to offer something that is out of the ordinary – something that’s cool enough to bring customers back and ordering from you again!
For instance, win back customers by giving away tickets to a local event (pro game, concert, performance, etc.) with a minimum purchase, create a scavenger hunt for your customers out of the catalog and give away the prize to everyone who finds it or put their name in a drawing to win it, purchase an AP branded item (oven mitts, cooler bags, shopping bags) and offer it exclusively to your past customers if they place an order with you again.
EXAMPLE: It’s a new year and we miss you! Come back, place an order of $100 or more on Catalog #1, and get 2 FREE tickets to the Star Stadium ARQ Theater!
We’ve missed you! Place an order of $50 or more from Catalog #1 and receive a FREE AP oven mitt!! Don’t miss out on this HOT deal!!
3. The Customer Feedback Offer
What would it take to win back customers? ASK THEM. Run a special promotion that asks lost customers to call you and tell you what they need to become a customer once again.*
*This kind of promotion should only be sent to customers who were loyal for 6 months or more and then stopped ordering. You want to target customers that had a strong purchasing history with you. These parameters will give you the best chance of turning lost customers into ordering customers again.
When past customers call, talk with them about why they aren’t ordering anymore. You will get valuable insight that you can use to minimize current customers from not ordering for long periods in the future.
Ask them what it would take to get them to start ordering again. If their suggestion is within reason, grant it. If their request is a little too crazy or outside your means, negotiate with them to come up with a deal both of you are happy with. Or let them know what you are willing to offer them to have them back as a customer again. Obviously, this promotion is personalized and time-consuming, but it could provide feedback that can drastically change your customer retention in the future and that is well worth it!
EXAMPLE: Let’s start anew in 2017. What would bring you back? I want to know. Call me at 1-555-555-555 and tell me how I can improve. All feedback is good feedback! I’ll give you $25 in FREE product on your #1 order.
These are just a few ideas on how to encourage past customers to start ordering from you again and I’m sure many of you can come up with better ones. Please share your ideas on our Facebook Groups and Good luck with building your customer base!!
Becky Price, RSM