How to Woo Back Former Customers

Dec 15, 2008 9:11 PM  By

The prospect responded to your offer by calling your 800 number or ordering online. Maybe they made one more purchase following their initial buy, but nothing more. You shipped the product(s) and two years have passed. Your customer hasn’t come back to order more.

How can you win these customers back?

Getting lapsed customers back is simple in theory but challenging in execution and requires understanding the group’s unique characteristics. In many ways, former customers behave more like prospects than current customers. They have lost a certain amount of trust in your brand, or their interest or need for your products has waned. Happily, there’s one big difference between prospects and former customers – cost. You already own the names for former customers and you don’t need to spend prospecting dollars to acquire them.

At what point is someone considered lapsed? If a customer hasn’t made a purchase from you in over 18 months, you may want to consider them lapsed and treat them as such.

It makes sense to be proactive before customers lapse – anyone who hasn’t purchased in a year is at risk for slipping into being a former customer. Take action with a special offer before more time passes and they ebb away, potentially for good. You probably don’t need as sweet a deal at this point as you would later in time, but recognize the value to you of getting a purchase from them after 13 months, rather than approaching them after they lapse at 24 months once you’ve spent quite a bit more money sending mailings attempting (in vain) to retain them.

It often makes sense to give a small discount or free item at 13 months rather than incur mailing costs from month 13-24 and offer an even greater inducement to get them back at 24 months.

To rekindle your brand’s appeal, you need to regain trust of former customers, appreciate their business, and make an offer they can’t refuse. It makes sense to acknowledge that the offer is being made because the customer hasn’t purchased in a while.

Doing this treats them uniquely – We all want to feel special. This is the thinking behind sending a “we miss you” offer. Make your offer exclusively available to former customers, and irresistible in terms of discount, premium or other benefits.

If you know the reason your customer lapsed, your offer can be even more targeted. For example, if they returned their last purchase and advised the reason for that return, consider sweetening your guarantee of satisfactions.

And don’t forget to segment your lapsed customer file based on duration since last purchase and number and mature of attempts to win them back. You need to be able to track results and know which offer work, as well as when to stop. You won’t ever be able to woo back 100% of former customers and it makes sense to determine when continuing to make offers is no longer profitable.

Shari Altman (SAltman@AltmanDedicatedDirect.com) is president of Altman Dedicated Direct.