The debate as to whether it is wiser for a business to focus on acquiring new customers rather than on customer retention will always be a source of contention. That debate becomes even tenser when the focus shifts to waking up dormant customers. Those are customers who have previously bought a product or used your service, but have been inactive customers for quite some time.
Either way, there is a case to be made for both practices. And a healthy business should find the proper balance between reaching for new customers and devising strategies for reactivating dormant customers. The payoff for each adds value to your business, though the means by which you engage these customers are quite different. In the haste to expand or solidify your brand, businesses should not ignore the importance of customer retention.
Why You Should Target Inactive Customers
The core of any business is based on its ability to generate revenue. Many businesses look to customer acquisition as a central means of driving revenue, but just as much attention should be paid to current customers or inactive customers. Though they may not have made a purchase in some time, the fact that they have initially shown an interest is your leverage point.
Easier to Reactivate Than Find a New One
The very fact that a customer is a customer is because they have purchased your product or service. The connection to your brand has already been established, and this consumer has already been converted into a paying customer. Reigniting their attention can be achieved much simpler and much cheaper than catching the attention of a new potential customer. Use your prior engagement with this customer to propose new products or services.
Smartest and Most Effective Way to Grow Your Business
Growth doesn’t necessarily have to happen strictly with acquiring new customers. Targeting inactive customers has much more widespread benefits than you may immediately realize. First, it actually gives you a blueprint for precisely what your target demographic looks like. The customers you have now likely look very much like the customers you will be targeting for acquisition. Another plus is that by focusing on retention, you avoid losing customers to your competitors. Research shows that when customers end a business relationship, 61% of them take that business to a competitor. So if you aren’t doing enough to keep your customers, you’re literally helping out your competition.
Enhance Brand Reputation
A strong customer retention or reactivation strategy also has the auxiliary effect of establishing your brand as one that takes care of its customers. It is hard to put a price on reputation, and this will help ensure yours is being viewed in the right light. Particularly in today’s consumer-driven environment, all customers want to feel special. They want to feel like they are being taken care of. If you can brand your business as one who looks after its customers, it can go a very long way in not just retaining customers, but attracting new ones.
Understand Future Needs of Your Customers
If you are able to hone in on what your current customers really want, it makes discovering the needs of your future customers that much easier.
Less Effort Needed During Sales Process
The process of acquiring a new customer has an exhaustive life cycle. Identifying ideal clients, lead generation, then developing a market strategy, and then testing that strategy repeatedly until it’s refined enough to actually engage a potential consumer. All of this takes time, energy, the cohesiveness of multiple departments, not to mention some dollars. Focusing your efforts on reactivating dormant customers is a much more efficient process, and one with a similar payoff.
Why You Should Use Direct Mail to Reach Your Inactive Customers
Direct mail has been a tool that has proven effective in reawakening the relationship between the brand and customer. There are ways to use direct mail effectively to get the very best results when launching a campaign to reactivate dormant customers.
- Test Your Most Recent Inactive Customers: They may have moved and you don’t even know it. The only way to be sure is by testing.
- Segment Your Customers: Segmenting should be a standard practice for your business. All customers are at different cycles. Segmenting allows you to target the right customer with the right message.
- Use Data to Personalize Your Message: It’s so important today that your copy is personalized to your targets. This will increase your chances of re-engaging your dormant customers.
- Make a Compelling Offer to Reactivate Inactive Customers: Nothing will peak a dormant customer’s interest more than an enticing offer. Do some legwork to get the offer right and go full force.
- Don’t Obscure the Message with Design: Customers who have been inactive for a while need your message to come through loud and clear. Yes, you want to be creative, but not at the cost of confusing your messaging.
- Give Reference to Local Retail Store in the Copy: If you have a retail store in close proximity to the customers you are reaching out to, then let them know.
- Add Value to Existing Customer Relationship: Let your existing customers know why they should come back to your brand. You should outlines some reasons that show your business is valuable and that these existing customers can gain something from returning.
- Change Your Approach Slightly: These dormant customers have been quiet for some time. This means neither you nor them are quite in tune with each other. The approach to reigniting the relationship needs to reflect that.
APS Fulfillment, Inc. knows the value of targeting dormant customers through direct mail marketing. We facilitate direct mail marketing strategies for our clients for both retention and acquisition. Both are crucial and focusing on current customers is an effective way to both grow your company and establish a solid reputation as a company who values its customers.
Our direct mail services at APS Fulfillment, Inc. include data processing and forms management, high-speed and selective inserting, and list processing, hygiene, enhancement, and pre-sorting. For a full descriptions of these services contact us by phone at 954-582-7450 or by e-mail at email@example.com.