3 Reasons You Should Re-engage Lapsed and Dormant Customers
Customer churn is inevitable, and every business will have a number of lapsed or dormant clients who haven’t bought from them in a while, but lapsed doesn’t have to mean lost. With the right re-engagement strategy, it’s possible to turn those lapsed clients back into active ones.
However, despite the potential of lapsed clients, many businesses choose to put more of their efforts and marketing budget into new customer generation, with only 18% of businesses focusing on customer retention. This could mean missed sales opportunities, not to mention wasted time and money.
Certainly, in our experience, we’ve delivered very positive results for our clients with re-engagement campaigns, engaging up to 42% of their lapsed customers. So, in this blog, we wanted to highlight the benefits targeting lapsed and dormant customers can bring, providing you with an effective alternative to new customer acquisition for generating fresh, relevant sales leads.
Save money
Generating, qualifying and converting new leads into paying customers generally comes with a higher price tag than the cost of retaining existing ones. This is particularly true in B2B industrial sectors like manufacturing, where the average customer acquisition cost (CAC) is as high as £555, which is likely attributed to more complex and longer sales cycles.
Depending on the industry you’re operating in, figures suggest it can cost up to five times more to attract new customers. So, it’s not that surprising to know that re-engaging lapsed and dormant customers is going to be a more cost-effective solution than generating fresh leads.
With lapsed customers, you have a ready-made list of potential prospects who you can reach back out to, which saves a great deal of time as the labour-intensive lead generation marketing process isn’t necessary.
Increase revenue
Implementing a customer re-engagement strategy that increases customer retention could also help you to increase revenue by 25% or more.
Part of this is because the overall cost of re-establishing relationships with lapsed clients is less, so it should deliver a better return on investment than new customer acquisition.
However, data also suggests that existing customers are 60-70% more likely to buy compared to 5-20% of new customers. This is because customers who have purchased from you in the past already know and trust your brand, and will realise the benefits your products or services give them without needing to be convinced.
Encourage brand loyalty
Customer loyalty can be a powerful thing. Especially when those loyal customers become highly-coveted brand advocates who are not just primed to buy consistently from your brand, but they’re happy to tell others to do so, too!
Through effective re-engagement campaigns, organisations can work on building customer retention and brand loyalty, which benefits them in the long term. Firstly, brand loyalty and advocacy will go toward strengthening brand perception and market share.
Secondly, turning those single-purchase patrons into repeat buyers or offering new product/software upgrades to customers who haven’t purchased in a while through upselling and cross-selling can provide future revenue growth opportunities, as repeat customers can spend up to 67% more than a new customer.
How to re-engage your client base
Re-engaging customers does require a great deal of thought in order to optimise engagement rates and get a decent return on investment. So, it’s important not to take time to create a proper strategy to find the right approach for your business, and most importantly your customers. Here are some steps to consider:
Identify your lapsed and dormant customers – segment your audience with parameters such as the type of purchase, time since last purchase, purchase frequency and type of interaction
Verify and update existing contact data – this will save you time, ensuring you have the most up-to-date contact details
Create your re-engagement messaging – establish a valid reason to contact them that adds value to the consumer
Outline your outreach process – think about the different methods and number of attempts you’ll make to reach them via email, calls, social media or a combination
Establish an ongoing customer nurturing strategy – consider how you will keep them engaged for better customer retention
If you’re unsure about implementing a re-engagement strategy yourself or don’t have the resources in house, it’s worth outsourcing lapsed customer engagement to an experienced team like The Call Business.
We’ve worked on a wide range of re-engagement campaigns within the B2B industrial sector, delivering up to 42% engagement rates with lapsed customers for our clients. Our team have the right hands-on experience and knowledge of B2B marketing to find the perfect solution for generating leads for your business. Get in touch with our team of experts today to get your campaign underway.