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Losing customers is inevitable. Determining which ones you’ve lost and those you want to win back is key to properly allocating your marketing budget.

First…Get to Know Your Customers
The first step in winning back lost customers is defining “lost.” Depending on your area of business, one definition is not likely to cover all of them, ruling out a “one size fits all” approach.
Remembering that not every customer is created equal can be crucial to winning your game of “Winback Hide & Seek.” A number of issues can cause customers to appear to go into hiding, but before seeking them out, you must determine if they are really hiding, waiting for you to seek them out or lost altogether. Looking closer at how your customers have interacted with your brand will help you figure out if they have truly been lost.

Here are three things you need to know about those lost customers to get them back:
1. Purchase Lifecycle: Product lifecycles can play a significant role in the purchase lifecycle of your customer. Are they buying products such as children’s apparel, which may need to be replaced more frequently? Or are they buying more long-term products such as servers, washers or new cars? This insight can help determine if these customers are really lost, while contributing to your communication cadence strategy. Customer engagement

2. Purchase Cadence: Your customer’s historical purchase cadence should be monitored. If a customer is a regular monthly buyer and you haven’t heard from them in the past two or three months, they have likely been lost. If your customers are more infrequent shoppers, it may take much longer to recognize their disengagement.

3. Why the Loss: Understanding the “why” of your customer’s loss is important.
Did they have a bad experience with a customer service representative? Has an “introductory” subscription lapsed, causing cable rates to increase?
Is the marketing message wrong? Is the customer not contacted often enough or too frequently? As an example, I recently overheard a conversation between my mother and sister regarding a craft company’s mail order catalogs. While Mom rarely gets them and was considering placing an order from the catalog she just received, my sister appeared to be a more desirable customer since she gets catalogs much too often for her comfort. “Oh, it must be Wednesday…I got my weekly catalog!” my sister exclaimed as she talked about how she’s ready to unsubscribe from the list altogether.
Has the relationship between you and your customer changed? Have they changed life stages or aged out of your brand? Are they no longer your target customer?
What channels do they interact with? Were they customers who regularly purchased from your website but are no longer visiting?

Whom Should You Seek?
Once you’ve determined a solid definition for your lost customers, the next step is figuring out who you want to bring back. First and foremost, you should ask yourself, “Is the customer worth winning back?” For instance, if I were notified that my expensive prescription glasses were waiting for me in the shopping mall lost and found a few towns away, I’d definitely go out of my way to get them back. On the other hand, if they called about my cheap reading classes, I wouldn’t waste my time to go pick them up. I’d just get a new pair. Similarly, a customer who is regularly spending hundreds to thousands of dollars with you is much more valuable than a customer who may spend a hundred dollars once a year.

It’s critical to evaluate the customer relationship with respect to profitability. A low maintenance relationship may be more profitable and, therefore, more valued than a high maintenance one. Techniques such as customer profiling, segmentation, recency/frequency/monetary (RFM) analysis and lifetime value (LTV) calculations can help determine the value of a customer and whether or not they are worth winning back. In addition, segmentation and profiling will inform the messaging used in your efforts to reactivate lost customers. Also of value is establishing how much you are willing to invest in trying to win back a previously lost customer.

Finally, using methods such as segmentation or modeling, you can select the group of customers you will actively seek to win back. With the proper message relevancy and cadence, you can appropriately target the right customers at the right time and through the right channel. Instead of deluging a customer with expensive catalogs that only overwhelm and turn them away, use everything you know about them and make the message relevant. Whether it’s a simple email message such as “We’ve noticed you haven’t visited lately,” a coupon offer for “15% off your next purchase” or a free movie download via video on demand, the secret to win-back is to first understand your customer. Only then can you put your customer intel to work in identifying their value, getting them the right message in the right channel and reactivating them as a purchasing customer within your marketing budget.

By: Christine Wells
Strategic Data Scientist at The Allant Group


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    Christine-Wells | Strategic Data Scientist at, The Allant Group

    Christine Wells
    Strategic Data Scientist at,The Allant Group
    Christine is a well diversified data scientist with Allant. She has core knowledge about the core product lifecycle and its pertaining implications on client retention and client satisfaction. She is extremely well diversified with product analytics.

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