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    eCommerce Increase Sales | 6 min read

    Reactivate lapsed customers with email automation

    Unlocking the latent customer lifetime value of your past customers

    Have you ever looked back through your past customer history and counted the revenue you'd bring into your business if you got even 20% of them to reorder with you this month or the next? If you've played around with the Xune Solutions SMART Growth goal calculator then you'll already have an appreciation for this as a concept.

    No doubt about it, there is definitely latent power in that list of customers who no longer buy from you. And, by putting into place tactics that increase the likelihood of the purchase you're affecting one of the most powerful business health metrics - customer lifetime value.

    Your average Customer Lifetime Value is the amount of revenue that a typical customer will contribute to your business over the lifetime of them doing business with you.

    And for most companies represent one of the biggest revenue streams into the business. In part, due to the fact it is between 5 and 25 times cheaper to retain an existing customer than to acquire a new one.

    In this short article, I'll discuss

    • Reasons why your business may be losing customers
    • How you can use email to win them back
    • Marketing automation tips to enable you to win-back at scale.

     

    Understanding the reasons why past customers lapse

    So, why have your past customers stopped buying from you? To understand that, we first need to understand some of the potential reasons behind it.

    Understanding why past customers lapse

    They forgot about you

    Sometimes life simply gets in the way, and the most well meaning customer gets beset by events that take more of their focus and renewing their business relationship with you simply gets pushed down their list of priorities.

    Downwards financial pressure

    Your customer is budgeting for themselves and/or their business and when downwards financial pressure happens they sometimes must reallocate existing resources and make the decision to cut down on expenses. This cut could take the form of a decision that they don't need your products and services anymore, which is especially true if you sell products which could be considered vanity purchases.

    Generally, your customer doesn't make this choice lightly and likely a decision made due to financial pressure often gets accompanied with an internal promise to themselves, that when times are better they will buy again and when that happens, you need to be there.

    In reality, whether your previous customer had good intentions to return or not, if it's left too long (and too their own devices) then they may fall into the previous category and forget about your business.

     

    Your competition 'stole' them

    Not a nice thought to contemplate, but one reason why your customer is no longer buying from you could be that one of your competitors has swooped in and turned their loyalty. And, if this is the case, it's imperative that you act quickly to re-engage and re-sell your value proposition.

    I would caution you to think twice before simply reducing your prices to win-back your past customers. It can be a much more effective strategy to increase the value of your brand in your customers eyes rather than lower it, not least the danger of you affecting your bottom-line too much by getting into the cycle of using desperation discounts. And while some money is better than no money, your overall brand credibility needs to be considered carefully when deciding how and when to use discounts. Do you want your customers to think "Should I go back to using this budget option, or stick to my newer more premium solution?"

     

    They no longer have a need for you

    Finally, the most palatable reason could be that by using your products and services you've solved a need for your customer so full and completely that they simply don't need to buy again. Great news! 

    However, keeping in regular touch with your now happy customer can have lasting benefits. Reminding them of how you helped in their time of need and leveraging customer reviews and positive sentiment can go along way to encouraging potential new customers to take that chance with you also.

    Ideas for customer nurturing at this stage include further usage instructions, product care tips and ways in which they can get the most out of your service. And, just in case they have a future need for you this regular contact will ensure you are the company they will turn to when that time comes.

     

    Writing high converting win-back emails

    One of the best tactics to increase customer lifetime value is by reactivating these former customers with targeted email sequences which progressively reinforce the complete value proposition of your company.

    For this to work, you'll need to segment your customer list into active and more recent buyers and lapsed customers, this is so that you don't send your current customer list emails which would either miss the mark or worse yet confuse them. You are of course free to decide how long to wait before a customer becomes lapsed, and a good starting point would be to look at the average lifetime of the product or services which you sell.

    Some starter segmentation to consider are;

    • New Customers - Customers who have purchased from you for the very first time.
    • Existing Customers - Customers who are regular buyers or who have purchased long enough ago to not be considered 'new'.
    • Lapsed Customers - Past customers who previously purchased from you, but haven't done so in a while.

     

    If you need any help setting these up then reach out to us so we can help.

     

    Simply ask them for their business

    ask past customers for their business

    The first step you need to take to win your old customer back is to simply ask, sending a polite reminder email reminding your customer to make another purchase can often be enough to stimulate their impulse to buy.

    Try to make this an easy as possible by lowering the barrier to reentry, eCommerce merchants can present the last purchase made or relevant cross-sells and up sells. Service industries can send reminders for renewals which include a one-click buy feature.

    Attempt to tie this in with the end of the expected lifetime of your product, and if you're going for the cross-sell ask yourself what additional items may they need 1 month, 6 months or a year from now? And tie in your 'Ask Email' with the logical progress on in their post Thank purchase journey.

     

    Remind them why they purchased from you in the first place

    Let's not forget, you've sold to this customer once before and in that moment you represented the most viable option for their needs. And reselling your proposition could just be the step needed to stimulate the buying impulse once again.

    Some tips for this particular email series include:

    • Reinforce your brand and showcasing what makes you unique
    • Reminding your past customer what is is that you stand for - and perhaps more importantly what you will not stand for
    • Highlighting any good deeds or community contributions which your company has done recently. 

     

    Temporarily lower the barrier to repurchase with an incentive

    A discount may go a long way to convincing a customer who is on the fence to once again pay for your goods, however, staggering your win-back incentives is recommended in order to protect your bottom-line.

    Better yet, segment your customers by past order value and provide higher discounts to higher paying customers and vice versa.

     

    Automate your workflows to win-back at scale

    Well written emails are great of course, but the real wins come through creating a sequence of emails and then automating that sequence in order to perform your win-backs at scale.

    Depending on your expertise level, you have two options.

     

    Entry level win-back automation

    Create a simple email chain which includes all of the principles discussed above. Start small, and remind your customers of the value of your brand before offering discounts. Save your discounts until the end of your email chain and keep the tone consistent with your brand message while being light and low pressure.

    Advanced win-back automation

    Simple email chains can work quite well for smaller operations, however, medium to large companies (or those with aspirations of such) can massively increase the potency of their lapsed customer win back with automated workflows which use past buying signals to deliver the right message to the right people, at the right time.

    It starts in much a similar fashion as the entry email chain, start by simply asking for the order and reselling your former customer on the value of your business. However, things take a turn for the epic when you get to the incentives. To walk through a small example, picture two different customers, one who buys an entry level product or service and another who has purchased your premium offering. Offering the same levels of discounts to both runs the risk of either eroding your profits too much with lower value customers or failing to give the required care and attention to your company's most valuable opportunities.

    With automated workflows you can segment your sequences to send more meaningful incentives to customers who have historically purchased more from you and vice versa. Even triggering a note to HQ/sales department when a particularly bigger customer hasn't purchased in a while and hasn't responded to the automated email chain. So your sales team can pick up the phone and give them a call.

     

    Conclusion

    The tone you use should be a friendly one, however matter of fact tonalities also work very well. Don't be afraid to try different styles of emails, and monitor what works for you and what doesn't using the email analytics to measure things like opens, clicks and unsubscribes.

    And as always, when it comes to email - make sure you are GDPR compliant ;)

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    eCommerce Increase Sales

    Misha Cunningham

    I believe in creating time. Time for myself in the form of a business I can run from anywhere. Time for our clients and potential customers who seek to avoid decision fatigue and know that they have a team of enthusiastic eCommerce marketers who are in their corner, fighting just as hard to make their business as successful as they are. Simply, I take complex eCommerce marketing and automate it.

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