Winning back old customers is like reconnecting with an old buddy from college 15 years ago.  Either you're right back to where you left off – great conversation over pizza and beer on Friday night or exchanging the obligatory "hello," "gotta run," or "good to...eh… see you..."

It’s the same in business when you try to re-establish engagements with former customers. Some customers will be familiar and open to doing business again and others will be….well…less than eager to re-engage. We all know getting back a former customer is less costly and often easier than attracting a new one (Insert obligatory factoid about the cost of retaining a customer versus winning a new one...), so that’s why it’s important to continually focus on win-back strategies.

Customers don’t return for a variety of reasons. Maybe they’ve moved or moved on… to a competitor. Perhaps they had a bad experience, or your marketing messages are just not reaching them or motivating them to purchase again. Knowing why they left can help as you develop your reactivation strategy. You may even want to exclude certain former customers – like low value customers, non-payers or frequent returners. Understanding why they left is the first step in segmenting your lapsed customer base for marketing.

The next step is segmenting your past customer base is to look at when they last did business with you, how often did they have been engaged with you in the past (rental, purchase, loan, etc.) and how much they spent. The best reactivation segments are those considered to be high value:  did business frequently, low return rate or default rate and an acceptable spend & payment history. These are the customers that any organization would focus attention to win back. Recency of the last purchase is also important to consider as the longer time frame from the last purchase date, the harder it will be to get them to return.  

Once you’ve segmented the different buckets of lapsed customers into several groups, messaging is critical. Ask for the sale, acknowledge it’s been awhile and you’d love to have them as a customer again. This is also where incentives or special offers are key to winning back a lapsed customer. Often times they don’t come back at the first invitation, so a follow up or series of communication may be necessary and through various channels – email, mail, and telemarketing.

Successful reactivation strategies are built on experimenting or testing different messages and timing. Regardless of what your customer base looks like, every organization has a unique reactivation strategy that will work best for them.

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