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Waking Up Dormant Customers

Did you know acquiring a new customer can cost 6 to 7 times more than retaining an existing one? This presetnation explores how retailers can apply audience measurement and analytics to successfully win back dormant customers.

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Waking Up Dormant Customers

  1. 1. Waking Up Dormant Customers Best Practices for Defining , Messaging , and Reactivating Customers with Email presents featuring…
  2. 2. DAVE HENDRICKS EXECUTIVE VP, STRATEGIC SALES & PLANNING www.datranmedia.com Introductions ANDREA L. GULLI VICE PRESIDENT, E-COMMERCE www.nyandcompany.com
  3. 3. What You Will Learn Today: <ul><li>How to define a dormant customer </li></ul><ul><li>How to better target your customers </li></ul><ul><li>How to leverage analytics to your advantage </li></ul><ul><li>How to communicate to different audience segments </li></ul><ul><li>How other retailers have won back dormant customers </li></ul><ul><li>Tips for creating your own win back programs </li></ul>
  4. 4. Did You Know Acquiring a New Customer Can Cost 6 to 7 times more than Retaining an Existing One?* * Frederick Reichheld of Bain & Company $
  5. 5. Did You Know The Average U.S. Company Loses Between 20 & 40% of its Customers Every Year?* * Frederick Reichheld of Bain & Company
  6. 6. DO YOU KNOW HOW MANY CUSTOMERS YOU LOSE PER YEAR? a) 0-15% b) 15-30% c) 30-45% d) 45%+ e) What customers? ---POLL QUESTION #1---
  7. 7. When Should You Consider a Customer to be Dormant? After 6 Months? After 18 Months? After 3 Years?
  8. 8. Do You Believe These Customers Are Lost Forever ?
  9. 9. They’re Not! ONLY THE PEOPLE ON THE ISLAND ARE TRULY…
  10. 10. dor·mant (dôr m nt) adj. 1. Lying asleep or as if asleep; inactive. 2. Latent but capable of being activated 3. Temporarily quiescent 4. In a condition of biological rest or inactivity characterized by cessation of growth or development and the suspension of many metabolic processes.
  11. 11. DO YOU HAVE AN OFFICAL DEFINITION OF A DORMANT CUSTOMER? a) Yes b) No c) Not sure ---POLL QUESTION #2---
  12. 12. Classifying Your Customers The ideal repeat customer. The casually loyal customer. The one-time or infrequent customer.
  13. 13. Classifying Your Customers The dormant customer. “ The walking dead,” as Wharton marketing professor Peter S. Fader calls them in his interesting study, “Modeling the Evolution of Customers’ Service Portfolios.”
  14. 14. It is unlikely that you are providing these customers with the type of “wake-up calls” they really need to remember you and shop again .
  15. 15. DO YOU MARKET DIFFERENTLY TO DORMANT CUSTOMERS? a) Yes b) No c) Not sure ---POLL QUESTION #3---
  16. 16. Simply sending more email is not the answer. You need to be smart and strategic when engaging dormant customers.
  17. 17. GROUP 1: NEW LIST MEMBERS GROUP 2: OPENS, NO CLICKS OR CONVERSIONS GROUP 3: OPENS & CLICKS, BUT NO CONVERSIONS GROUP 4: OPENS CLICKS, & CONVERSIONS GROUP 5: NO OPENS CLICKS, OR CONVERSIONS Segment Your Audience
  18. 18. But are not being used to define and reactivate dormant customers . Analytics are driving today’s marketing decisions.
  19. 19. Active customer Inbox Dormant customer Inbox Tailor Messages Accordingly…
  20. 20. Analyze Shopping Behaviors When do they open? What type of offers do they open? When was the last time they opened? When was the last time they bought? What is the average number of transactions for ‘best customers’? What does the ‘most profitable customer look like’ What does the non-buyer look like?
  21. 21. Start a Dialogue
  22. 22. Timing is Everything! Single Mom Busy Exec Cashier
  23. 23. WINNING BACK DORMANT CUSTOMERS: A BRAND’S EYE VIEW
  24. 24. 2009 Industry Stats <ul><li>88% OF RETAILERS SURVEYED SAID EMAIL WILL HAVE INCREASED PRIORITY IN 2009 </li></ul>
  25. 25. 2009 Industry Stats <ul><li>ONLY 35% IDENTIFIED REACTIVATION EMAILS AS ONE OF THEIR KEY STRATEGIES </li></ul>
  26. 26. Has Customer Reactivation Been a Priority in the Past ? a) Yes b) No, but it will be now c) No plans to focus on it now ---POLL QUESTION #4---
  27. 27. PREVENT DORMANT CUSTOMERS IDENTIFY & RE-ENGAGE DORMANT CUSTOMERS TEST, TEST & RE-TEST CONSIDER EXTERNAL PARTNERS DORMANT CUSTOMER EMAIL PROCESS STEP 1 STEP 2 STEP 3 STEP 4
  28. 28. PREVENT DORMANT CUSTOMERS <ul><li>BEGIN WITH THE END IN MIND—DEVELOP COMMUNICATION & CONTACT STRATEGIES FOR ALL PHASES OF ENGAGEMENT, TO PREVENT CUSTOMERS FROM BECOMING INACTIVE: </li></ul><ul><ul><li>ATTRACT —WELCOME EMAIL STRATEGY </li></ul></ul><ul><ul><li>INTEREST —CUSTOMER-CENTRIC SEGMENTATION (GEO, PRICE POINT, RFM SEGMENT, TRADE AREA, CHANNEL PREFERENCE, PRODUCT/SIZE, ETC. </li></ul></ul><ul><ul><li>TRANSACT —ENCOURAGE CUSTOMER TO BUY BASED ON WHAT YOU KNOW ABOUT HER </li></ul></ul><ul><ul><li>COMEBACK —LEVERAGE THANK YOU EMAILS, FOLLOW UP EMAILS SPECIFIC TO PURCHASE, GO-WITH ITEMS, UPCOMING PROMOTIONS </li></ul></ul><ul><li>DEVELOP TESTING & IMPLEMENTATION STRATEGY TO SUPPORT THIS </li></ul>
  29. 29. IDENTIFY & RE-ENGAGE DORMANT CUSTOMERS <ul><li>IDENTIFY THE POINT OF NO RETURN—BEYOND WHICH CUSTOMER GOES INACTIVE </li></ul><ul><li>1) BEYOND FREQUENCY, LEVERAGE EXISTING SEGMENTATION TO UNDERSTAND CUSTOMER BEHAVIOR </li></ul><ul><ul><ul><li>1X BUYERS/MULTIS/SINGLE CHANNEL/MULTI CHANNEL/LOYALTY </li></ul></ul></ul><ul><ul><li>2) OVERLAY AVAILABLE EMAIL/WEBSITE BEHAVIORAL DATA </li></ul></ul><ul><ul><ul><li>OPENS/CLICKS/CONVERSIONS </li></ul></ul></ul><ul><ul><ul><li>SITE ACTIVITY/OFFLINE ACTIVITY </li></ul></ul></ul>
  30. 30. <ul><li>LIST </li></ul><ul><li>IDEALLY A CROSS SECTION OF ENTIRE DORMANT FILE </li></ul><ul><li>ALTERNATIVELY, SEGMENTS MOST LIKELY TO RESPOND </li></ul>TEST, TEST & RE-TEST <ul><li>OFFER </li></ul><ul><li>GO WITH THE MOST AGGRESSIVE OFFER YOU ARE ABLE TO FUND </li></ul><ul><li>ALTERNATIVELY, A/B TEST AGGRESSIVE OFFER VS. PROVEN WINNER </li></ul><ul><li>CREATIVE </li></ul><ul><li>KEEP CREATIVE SIMPLE </li></ul><ul><li>LET SUBJECT LINE DO THE HEAVY LIFTING </li></ul><ul><li>TEST, TEST & RE-TEST SUBJECT LINES </li></ul>
  31. 31. CONSIDER EXTERNAL PARTNERS <ul><li>ONCE YOUR ONGOING INTERNAL REACTIVATION CAMPAIGN PROGRAM HAS BEEN IMPLEMENTED </li></ul><ul><li>-PARTNER WITH YOUR ESP, CHANGE OF ADDRESS, CRM, EMAIL APPEND VENDORS TO LEVERAGE OTHER DATA ABOUT YOUR DORMANT CUSTOMERS AND BUYING PATTERNS </li></ul>
  32. 32. The Win Back Take Away… <ul><li>DON’T DISREGARD YOUR DORMANT CUSTOMER FILE </li></ul><ul><li>TAILOR MESSAGES TO THEIR NEEDS </li></ul><ul><li>TIMING IS EVERYTHING </li></ul><ul><li>UNDERSTAND THEIR CURRENT PURCHASE BEHAVIOR </li></ul><ul><li>DO NOT SNED THEM THE SAME MESSAGE YOU WOULD SEND A RECENT CUSTOMER </li></ul>
  33. 33. Thank You! ? ! Q and A s Copyright 2009, Datran Media Corp. All Rights Reserved
  34. 34. For More Information on Monetization…. WWW.DATRANMEDIA.COM 888-494-4ROI [email_address] Copyright 2009, Datran Media Corp. All Rights Reserved

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