How to identify and re-engage lapsed customers
Customer re-engagement is essential for all marketing teams, everywhere. No matter your industry, sector, or vertical, it’s always going to be cheaper and more efficient for you to convert existing customers than recruit new ones.
Re-engagement tactics help keep your profits growing, but to achieve this, you need to have the tools in place to help you identify and target customers at this crucial stage of their journey.
What is a lapsed customer?
A lapsed or inactive customer is someone who hasn’t made a purchase or interacted with your brand within a set timeframe.
Depending on your brand, business, or customer lifecycle the timeframe can vary significantly. You need to understand the customer and their needs to determine how and when you define them as lapsed.
Data – as always – is key.
How to identify lapsed and lapsing customers
Now more than ever – in light of Apple’s upcoming privacy updates – it’s important for us to step back and figure out exactly what we measure and how we use it to identify lapsed customers.
In the world of email marketing, we’ve long accepted open rates to be an indication of customer engagement, but is it?
Apple’s iOS 15 release has got many of us questioning the importance of open rates and thinking about what can be used to measure engagement. When you understand how customers are engaging with your marketing, identifying when they stop acting in this way will be easier.
Interactions not opens
What do opens actually tell you? Not much.
In a way, open rates can be considered a vanity metric. Even before Apple’s announcement, open rates have been considered to be inconsistent and unreliable.
Instead, you should be focusing on collecting measurable metrics that express customer intent.
Interactions such as in-email clicks, pageviews, recent purchases, and active carts are just a couple of ways to identify active customers. Therefore, a lack of these metrics indicates that a customer is lapsing. How long it’s been since they last interacted with you is the difference between lapsing, lapsed, and fully unengaged audiences.
You’ll then be able to use these insights to segment and target customers, delivering the right content at the right time to drive them back into the fold.
Why is it important to identify unengaged subscribers?
Identifying and targeting lapsed and unengaged customers matter for a lot of reasons including but not limited to:
- It’s more expensive to acquire new customers than re-engage existing ones.
- A large number of inactive contacts in your marketing lists can hurt your deliverability.
- Existing customers who already know and trust your band will spend more money with your brand.
- There may be high-quality leads (e.g., high spenders and brand champions) lurking on the edge of lapsing – you need to keep these contacts engaged to keep revenue high.
5 tactics to re-engage lapsed leads
1. Win-back discount campaigns
Discounts are always going to be a winning tactic to re-engage shoppers. Who doesn’t love the chance to get money off their favorite brand or products?
The brilliant thing about this tactic is you can really drill down into your unengaged segment and adjust your campaign. Using customer modeling tools like eRFM you can build segments such as need nurturing to target those about to lapse, unengaged to target subscribers who have recently lapsed, and inactive to re-engage those who haven’t interacted in a long time. You can then tailor the discounts and deals you offer.
Similarly, RFM modeling enables you to target customers based on their lifetime value. If a shopper used to be a high spender, offering a tiered discount is a good way to drive them to spend more. For example, $10 off when you spend over $50, $30 off when you spend over $100.
2. Preference updates and feedback gathering
Don’t be afraid to ask customers what they want. You’re here to provide a service to your subscribers. You want them to get maximum value out of your brand communications, and the only way to do that is to understand what they want.
Asking customers to update their preferences will help you discover their needs. When you understand their needs, you’ll be able to deliver relevant content that improves their every interaction with you. If a customer has stopped engaging with your email marketing because they’re receiving too many campaigns or their interest has changed, a preference update prompt will help you reassess their needs and add them to the relevant segment.
Similarly, you should never miss an opportunity to ask customers for feedback. Even when they’re unsubscribing, feedback is an essential element of marketing. It’s the best way to discover weaknesses in your marketing strategy. Asking for feedback, you’ll be able to discover what customers like and don’t’ like about their experience with you.
3. Personalized product recommendations
Personalization is a surefire way to engage customers. Personalized product recommendations based on customers’ past purchases, or AI-powered recommendations based on also bought items use customer data to elevate the customer experience.
After a shopper has lapsed, these are a great way to showcase your product range and to remind them how well you know them. A subtle push like this can inspire lapsed shoppers back to your website and towards conversion.
4. FOMO content
The FOMO is real! Tapping into customers ‘fear of missing out’ is a great way to drive them back into the fold.
‘We miss you’ campaigns that offer subscribers exclusive access to new ranges and upcoming sales make them customers feel special. As if they’re valuable to you, not just a faceless address on a mailing list.
5. Triggered reminders
Depending on your customer lifecycle there may be long gaps between purchases. During this time, it can be especially tough to maintain customer engagement.
To ensure customers have as smooth a journey as possible, triggered reminders can help bring shoppers and users back to your website. Back-in-stock, replenishment, and seasonal reminders can run in the background, targeting customers at the optimal time to drive re-engagement.