A huge amount of time and money is spent on customer acquisitions to grow a business by the number of people who purchase its products and services. It doesn’t mean that if a business successfully acquires customers that they are good at making money. The markets are competitive across many industries from retail to financial services which reflect in higher customer acquisition costs.
Attracting a new customer can cost up to five times more than to retain an existing customer (Lee Resources) and that’s why customer retention is becoming increasingly essential. According to Bain & Co, increasing customer retention rates by 5%, can increase profits by 25% to 95%. The probability of selling to an existing customer is 60-70% compared to 5-20% to a new customer (Marketing Metrics).
Thanks to today’s technology and digital channels, we can retain customers more effectively. Here are some guidelines on how to re-engage with a dormant customer via email:
PERONALISATION: Segment your customer base into customers who haven’t opened an email in or responded to a promotional mailer the last e.g. 12 months. Take into account these identified customers’ preferences or past purchase behaviour in order to add relevant value to their experience when retargeting them after 12 months.
RETARGETING: Create engagement to bring customers out of hibernation using contained messages such as “Are you there?” Macy’s used this approach over a six weeks period and produced a 6% increase in active email subscribers, a 9% increase in open rates and a 14% increase in click-through rates of unique recipients.
BROADCAST TIME: Timing is everything. Investigate the average time a recipient opened and clicked on their email within the last six months and broadcast your mailers at that specific time.
SUBJECT LINES: More transactional type of subject lines can be used e.g. “Please verify today” and “Confirmation requested”.
FOLLOW UP EMAILS: Follow-up emails can be sent if a customer didn’t engage within a short period of time.
APPROACH: The approach to re-engage with an inactive customer will differ from company to company and will also depend on the type of target audience on your customer database.
PREDICT AND PREVENT: It’s important to predict when customers are likely to be lost or go into hiding by identifying customers’ attributes through predictive analytic tools. Companies should take the opportunity to engage with these customers sooner rather than later in order to prevent them from becoming inactive.
Companies tend to forget to retain their customers and also ‘win’ back the inactive ones. Email marketing is an effective marketing tool to consistently engage with your existing customers and wake your dormant customers from hibernation.
Need assistance with your email marketing strategy? Get in touch with Digital Fire.