When you first launch a product or service, you'll naturally get a surge of interest. People will want to know what your business is all about—perhaps you might get a couple of curious buyers. However, after the initial burst of activity, things will calm down. If you want to drum up business, or if revenue is getting lean, don't go out to find new leads.
Instead of looking for brand new customers, turn your losses into gains and re-engaged people who have become inactive. Customers who signed up for your mailing list but went cold, ones who haven't visited your website or store in months, and those who purchased once and never came back aren't "lost causes."
An inactive customer is not a failed connection—instead, they represent opportunities waiting to happen. Here are reasons why you should win back lost customers instead of finding new ones.
You Spend More in Acquisition than Retargeting
Any business needs to attract new customers so it will grow constantly. However, it costs more to acquire than retarget customers. Usually, the cost of acquiring a new customer comes from several places:
- Banner and display ads, pop-ups, TV and print ads, and other traditional, outbound forms of marketing;
- Blogs, SEO, social media, and other forms of inbound marketing;
- Costs of hiring sales and business development specialists, which includes salaries and commissions;
- Trade shows, conventions, and other event-based marketing strategies, and more.
To keep attracting new customers, you need to keep these marketing channels open, which costs money. Often, it costs a business as much as five times more to get a new paying customer than convince an old one to buy its products.
Inactive Customers Already Trust Your Brand
Another reason why you should retarget old customers instead of acquiring new ones is that the former already knows you. Top-of-funnel prospects are likely to be more skeptical of your brand. Until they become a paying customer, they'll have many objections to your offerings, especially in the beginning.
However, a prospect who has traveled through your marketing funnel will be more likely to trust your brand. A person who has bought once will likely buy again—barring any serious defects in the product or their customer experience. Invest in people who already think you're good instead of trying to win strangers over.
Inactive Customers are Familiar with Your Products
You cannot count on strangers to choose your products, but inactive customers aren't strangers. When someone interacts with your business, you leave an impression on them. An inactive customer only needs to remember your product offerings—no need to convince them that what you sell works.
Deploying an ad campaign through Facebook or Google Ads can keep your brand alive in the minds of inactive customers. If they were happy with their purchase the first time around, this nudge might be all they need to purchase from you again.
Besides, why would you abandon customers who have already purchased from you? They have already demonstrated that they need your products; they'll likely need more of them in the future. You don't need to spend a lot of resources attracting them to your offers. For example, if you have a segment of customers who only purchased once—during a flash sale—try to get them to purchase again using a discount or an exclusive offer.
You Don't Have to Do Extensive Data Gathering
New leads are an unknown factor to you. You aren't sure if they'll like your products, become brand loyalists, or complain about their experience. However, you already know a bit about inactive customers. You have data on when they purchased, through which channel, and what they bought. You also have information on their lifetime value or any complaints they made.
If inactive customers signed up for an email newsletter from your business, you could put them on win-back campaigns. You could even create personalized ones, segmented and targeted for specific types of customers.
Studying your data on these customers will give you insights into how you can get them to purchase from you again. For example, you could use marketing automation software to identify customer segments that are likely to churn. You can use that information to create a message that will keep these customers engaged and send it at a crucial point—before they leave, for example, or when they've been inactive for a certain number of weeks or months.
Reaching Out Helps You Improve Your Marketing
When you reach out to inactive customers, don't consider it a diagnosis or repairing a "damaged" relationship. Instead, see it as an opportunity to improve the delivery of your products and services. Even if they are on the verge of leaving, you can still gain valuable insights from them and see how you can improve the next customers' experience.
You could attempt to get the inactive client on a call or respond to a win-back email. Something as direct as asking them why they aren't buying from your store could work, though you could provide deals or one-time offers to get them back. The responses you get from these emails and interviews could surprise you; there could be things about your product or service that you didn't know need improving.
Win-back strategies are an effective way to re-engage people who haven't bought anything from your business in a while. It can help boost a customer's lifetime value and promote your new products and services.
Effective win-back strategies allow you to bring in more revenue without having to spend on expensive marketing and targeting campaigns geared toward people who have never interacted with your business. Whether you focus on retention or acquisition, though, what's most important is connecting with your audience. If you can communicate the benefits of your product, deliver value, and encourage customers to reach out to you, any resources you spend on marketing should be worth it.
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