Rita Braga Martins
Rita Braga Martins
Posted 13 August 2020

5 reasons customers become “inactive” or “lapsed” and how to win them back

For this post, Ometria’s email marketing consultant, Rita, offers advice on how ecommerce marketers today can go about (a) identifying inactive customers, and (b) re-engaging them.

In an ideal world, all of your contacts would be engaged and consistently purchasing from you. We all want our customer base to be active, engaged and frequently buying. But it’s not always the case. And at the same time, you always want to grow your list and and hopefully the contacts you acquire make up for the ones you lose. 

How do you keep customers engaged and what should you do once they become ‘inactive’? Again, in this ideal world, there would be more new customers to make up for those who lapse or become inactive. But this isn’t always the case, and gradually most retail businesses will see their email revenues go down despite a growth in their database.

This is why we’re going to breakdown why you should focus on re-engaging those who are ‘inactive’ and how to make the most of your existing database of customers.

Why should you focus on ‘inactive’ customers?

Acquiring new contacts is more expensive than reactivating old ones—so if your engagement is going down, you should tackle that issue rather than relying on increasing your database. You may have very high quality customers that are in those inactive segments. So they are typically your high spenders or frequent customers that you want to get back.

Workshop - Customer reactivation - June 2020

What are the 5 reasons customers become inactive?

So how do you define it? Contacts. This is quite specific to each business. And there isn’t a specific definition you should go for in terms of timings or characteristics. But there’s usually five criteria we like to consider.

 1.Buying behaviour in the sales cycle of your product.

This is tied into whether your product needs to be replenished more, like food or makeup. If it’s a product that’s a more considered purchase, such as a high value piece or furniture, customers are less likely to be making consistent purchases of the item.

2. Visit activity

Whether or not contacts and customers are coming to your website and browsing. If you have low visit activity from key segments, those contacts may be ‘inactive’. 

3. Email engagement.

 Your revenues are naturally tied to engagement. When engagement goes down, your average CLV (Customer Lifetime Value) goes down as well. Most engaged contacts are customers, so if they stop engaging with your brand, then it means they’re probably buying less. So, when it comes to email, the overall ROI is higher when your list is engaged.

4. Poor deliverability. 

Growing an inactive list impacts your email deliverability. Definitions of “spam” today aren’t as content-focused as they used to be—if ISPs see that you’re sending email after email to contacts that aren’t opening them, they could start placing your emails into spam instead of the inbox, as they now focus more on how subscribers are responding to your emails. So re-engaging inactive contacts should boost overall deliverability. (You can find out more about email deliverability here).

5. Generic content. 

If the content you create isn’t personalised, shoppers will very quickly tune out. No one wants to receive marketing messages that feel like one of hundreds. Your contacts expect to have emails that are crafted with them in mind. With GDPR now firmly in place, the opted-in contacts you have are extremely important. They have actively chosen to receive marketing from you, so why not make the experience as advanced as possible?

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Who are your inactive contacts?

So, how do you actually go about reconnecting with the disengaged? The first step is identifying who your inactive contacts are. There is no set definition here—ultimately, identify what “inactive” means for your business using the below criteria:

  • Sale cycle and buying behaviour

What do you sell? Is it consumables, is it fashion, is it furniture? How often do you expect a customer to buy within a year? If you sell drinks, for example, you might expect them to buy every month, but if you sell beds you may expect them to buy every 3+ years.

Start by analysing your order gap and define what is your expected active buying period.

In addition to this, for new contacts that didn’t immediately buy: what is the average time they take before becoming customers? How long after they get to know your brand should they take to place their first order?

  • Visit Activity

The next step is to consider browsing behaviour. How long has it been since they last visited your website? How often do you expect customers to visit your website in general, is it a product they need, or are they investing in an experience?

  • Email engagement: Frequency & Recency

Then finally think about email behaviour. Determining whether a contact is “engaged” or not depends on your email frequency and recency.

You need to consider how often you send emails and how recently they engaged with them; for example, if you’re a daily sender, you might consider a subscriber as inactive if they don’t open your emails after one month. If you send two to three times a week, you might need at least three months before you consider someone as inactive.

Of course, this will be a lot easier to do if you have all the information in the same place: a single customer view is essential to determine whether a contact is truly active or inactive.

Let’s take a shoe store, for example.

They might define “inactive” as:

  • Not bought within 6 months
  • Not visited in 3 months
  • Not opened an email in the last 3 months

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The 3 principles for getting your inactive contacts back on board

Below are three simple steps to rebuilding customer journeys for your inactive customers:

1) Select your inactive segments

After you’ve defined what inactive means for your brand, think about the inactive customer segments you want to target; ask yourself questions such as: “Who are the customer groups that give us the most revenue?” “Who are the frequent buyers?”

Using the shoe store example, you could choose the below inactive segments:

  • VIPs (CLV > £250)
  • Leather collection buyers (top category)
  • End of season buyers (buy every year from Sale)
  • Recent inactive Leads (signed up 3 months ago, still haven’t placed an order)

2) Create tailored content for each segment 

Now it’s time to define the content you want to promote to each one of these inactive segments. To do this, think about what would really resonate with them—this might include product affinity, your brand tone and message and any editorial content that you could send that would make the correspondence feel more personalised than your business-as-usual communications.

3) Define the marketing channels you want to use 

Finally, think about the individual customer journey.

Which touchpoints are you going to use for each segment? Which channels, and in which order? It could be via on-site personalised content, email automation, social retargeting, in-store events, etc.

For the inactive Leather collection buyers segment above, first send them an automated win-back email, combine it with your newsletters, and add relevant content on the Leather products only. If that doesn’t work, retarget them on social media with ads themed around that category. If that doesn’t work, send them a gift via post.

The main idea here is to again think about this from the customer journey perspective, not the channel perspective. At any point a customer can disengage, so you need to use all the information you have about them to market to them in a way they will respond. Find out which touchpoints work best for each segment, and make sure the message is delivered in the right way, across the right channels and at the right point in a customer’s journey.

Monitoring engagement

After you’ve set up these winning strategies, make sure to monitor all engagement and conversion metrics closely, both positive and negative.  This enables you to analyse which journeys are working or not, and assess the effectiveness of the above efforts to re-engage your inactive contacts. And no matter how you end up tackling reengagement, stay focused on reinforcing the value of your brand and pushing content that is relevant to each of your customers.

A final advanced step: automation opportunities  

How well do you know your customer journey? Very often after creating campaigns, they run in the background – encouraging more interactions as intended – but not being checked on to see if they still reflect a typical journey with your brand. Sign up to your different campaigns and experience your brand as your contacts do.

  • Which touchpoints do you have in place?
  • Do the messages feel cohesive as a collective experience
  • Are there gaps in the experience where you could have interacted with shoppers?
  • How far are the cadence of your messages? Should they be changed?

Truly thinking about the customer journey beyond the execution of the campaign, will work to make you more strategic when thinking of customer touchpoints and increase your knowledge on your brand’s specific customer journeys. Empowered with specificity and the insight to serve customers relevant experiences, you can both re-engage inactive customers and encourage loyalty with long-time shoppers.

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