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Re-Engaging Inactive Customers for Your Business

“It costs 5x as much to attract a new customer than it does to keep an existing one” – you’ve probably heard something along these lines when it comes to customer retention. While that figure varies in different industries and businesses, it does highlight the importance of giving your existing customers a great experience and keeping them happy and engaged with your brand. That’s why when customers become inactive, it’s important to know what to do to re-engage them. In this article we’ll explore why re-engaging inactive customers is important, which marketing channels work well in doing so, and how re-engagement fits into your overall marketing strategy.

Re-Engaging Inactive Customers – Why?

To start off, let’s define an “inactive customer” – a customer who has not interacted with a brand for a significant period of time. Each business or industry might determine their own “significant period” based on what they consider to be a normal pattern of purchasing behaviour amongst their customers. But while a customer may be inactive, they are likely still in your system and can be marketed to in a direct and targeted manner.

As noted above, it generally costs more to win a new customer than it does to sell to an existing customer. Statistically speaking, existing customers are 50% more likely to try new products and spend 31% more than new customers. Further to this, the probability of selling to an existing or inactive customer is 60-70%, whereas that drops to between 5-20% for prospective new customer. This data indicates the significant advantages of marketing directly to your existing customers as part of your overall marketing strategy.

Re-Engaging Inactive Customers – Where?

One of the pillars of your business’ marketing mix is Promotion – the communications involved in reaching customers and persuading them to purchase or find out more about your product, service, or business. This is finding where your customers are (in a physical or digital sense) and specifically where they are likely to be responsive to marketing communications. It is important to know this for finding new customers, and that’s where the marketing mix often applies, but it does lend itself to re-engaging inactive customers as well. What’s more, the marketing channels best used for finding new customers and retaining existing ones can often be different.

For instance, the online channels most often employed to generate new leads for a business are paid search, online display advertising, SEO, and web retargeting. Meanwhile, those used most for retention and re-engaging inactive customers are websites, social media marketing, mobile web, and email marketing. There is merit to using these channels for both purposes, however a well-structured marketing strategy should allocate the appropriate resources to each of those channels in a way that will more effectively reach your business’ marketing goals.

Re-Engaging Inactive Customers – How?

In the ‘why’ section of this piece, we touched on the fact that different businesses and industries will have varying standards for what constitutes an inactive customer. Therefore, re-engaging yours will likely happen to a timeline that differs from other businesses. As a starting point, consider defining the point at which a customer becomes inactive. Once you have established this, determine how you will reach out to them – is it a phone call? An email campaign? A message on social media? Ideally, you will have data on hand which outlines how your customers usually engage with your business, so you can find them where they are likely to be responsive. Also consider what your messaging will be when you re-engage. This could be a special discount exclusively for returning customers, an update on what’s new in your business since they last made a purchase or enquiry, or asking for feedback on their experience with your business. As with any outbound communications with customers, tailor your content to them, be clear with your purpose, and make sure your value proposition is clear.

What’s Next…

Taking control of your customer experience from start to finish is a significant undertaking – one that most business owners simply do not have time for. Given the time required to effectively market your business and brand in a strategic manner, bring in new customers, and re-engage inactive customers, it’s wise to engage with marketing professionals. McKinley Plowman’s Brand Plus offering gives business owners the opportunity to grow their business through strategic marketing without the hassle of taking it all on themselves. To see how we can help take your business to the next level with a free initial consultation, contact us today via our website or give us a call on 08 9301 2200.

Data from: Invesp – Customer Acquisition vs. Retention Costs

written by:

Ben Hart

Ben joined the McKinley Plowman team in 2017 as a Marketing & HR Assistant, after completing a Bachelors degree in Marketing & Management from the University of Western Australia. Ben has since stepped up to the role of Marketing Manager and oversees the marketing activities for MP+ and many of our clients.

Ben enjoys helping clients take their businesses to the next level with thoughtful marketing strategies, innovative solutions, and timely reviews to ensure great outcomes. When he's not in the office, you'll find Ben playing football (soccer), watching it, or reading about it.