Win back inactive customers: don’t spend 5x more money on acquiring new customers

Autopilot in Growth hacking on 12th of Oct 2020
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Win back inactive customers: don’t spend 5x more money on acquiring new customers

Why you should re-engage lost Shopify customers

Up to 50% of your existing e-commerce customer base could be inactive (Smart Insights). Here are the top reasons why they are currently not buying from your store:

  • Flash sale purchase: an opportunistic transaction
  • Interests have changed: a trend or seasonal factors
  • One-time buy: needs have since been met
  • Dissatisfaction: unhappy with your service or products
  • Cluttered inboxes: not receiving your emails

So, what should you do with these dormant customers who are no longer opening your emails or engaging with your business? While most businesses abandon them, we’re telling you not to.

Change your mindset: turn losses into gains

It may seem counterintuitive to focus your marketing efforts on those who have expressed disinterest in your company by being inactive, but it really all comes to changing your mindset. All too often, we associate an “inactive customer” with “failure,” when they should be considered an “opportunity.”

Here are 6 reasons why you should prioritize re-engaging (or “winning back”) these lost customers over acquiring new ones:

1. Acquisition costs more money

It initially makes sense for us to spend more time and money on acquisition rather than retention. While acquiring new customers is critical to growing your e-commerce store, it often comes at a high cost to your business. Typically, acquisition can be broken down into the following costs:

  • Outbound (or traditional) marketing such as banner and display ads, pop-ups, and TV and print ads;
  • Inbound marketing such as blogs, SEO, and social media;
  • Sales and business development expenses, including salaries and commissions; and
  • Event marketing strategies, such as trade shows and conferences.

And so on. To keep acquisition numbers growing, businesses must keep running these programs — and continually inject more money into them. It, therefore, comes as no surprise that the cost of acquiring new customers can often be 5x more expensive than retaining existing ones (Invesp).

2. These customers already trust you

Here’s another reason why there’s a significant difference between acquisition and retention: the barrier to entry is much higher for top-of-funnel prospects (i.e., your new customers). Simply put, customers don’t buy from brands they don’t trust.

And until a prospect becomes a paying customer, they will not truly trust your brand — at least not in the beginning. But as that prospect flows through your marketing funnel, that trust can strengthen. And once they become a customer, that trust will become the glue that will keep them as a customer, influencing their decision to buy, or not buy, from your store again.

3. The power of brand recognition

If people don’t know who you are, they won’t be able to purchase your products. Brand awareness happens the moment someone remembers your brand from having already seen your logo or interacted with your business.

Your inactive customers are familiar with your brand and product offering, more so than cold leads. For this reason, there’s no need for you to implement lengthy awareness campaigns or comprehensive brand introduction. These customers already know your brand and your value proposition, so winning their business back may actually not be as hard as it seems.

For example, you might like to take advantage of this established familiarity by deploying a Facebook or Google Ads retargeting campaign to keep your brand presence in front of these inactive customers. To remind them to finish what they started, you might like to create an ad similar to vintage clothing store Modcloth’s.

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4. They have an established need for your business

Why would you abandon a customer who has already purchased from your store? Unlike new visitors, these inactive customers have already demonstrated a need or desire for your products — they wouldn’t have bought from your store in the first place if that wasn’t the case. So unless their circumstances have changed dramatically, they’re still your ideal target audience. This means that you don’t need to spend a lot of resources to validate a new audience.

In other words, they’ve been engaged at some point before, so you know that they’re warmed up to your brand. For example, you may have a segment of customers who only made one purchase — and this was during your last Black Friday flash sale. Try winning them back by offering a similar discount and see if they take action.

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5. You already have existing data on these customers

You know nothing about your new customers. On the other hand, you already know quite a bit about those inactive customers. You know when they’ve signed up for your email newsletter and when they made their first purchase from your e-commerce store. You also know their lifetime value, engagement rates, and whether they’ve made any complaints. This means you can make your win-back email campaigns highly personalized.

Study all the behavioral data your marketing automation and CRM solutions will have on these customers — and use that information to win them back. For example, your marketing automation software may give you the ability to predict which customer segments are most likely to churn or stop buying from your store. Use that milestone to deliver a compelling message to these disengaged contacts at the moment that really matters most.

6. They can help you uncover improvement opportunities

Reaching out to these inactive customers can help you pinpoint opportunities to improve product and service delivery — even if they’ve already defected or are on the verge of leaving. You can simply ask these customers why they’re no longer interacting with your emails or buying from your store — and find out how you can improve your content or offerings to serve them better in the future, just like Artifact Uprising did with the following win-back email.

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Win back lost customers — and lost revenue

Not only is a win-back strategy an effective way to re-engage inactive customers. But when done correctly, it can increase spending frequency, help promote new products or services, and boost customer lifetime value. Your customers that have fallen by the wayside aren’t gone forever. With an effective win-back strategy, you can return them to the fold much faster, easier, and cheaper than acquiring a new customer to replace them.

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