Have you noticed a portion of your once-loyal customer base has gone dark? Or have your sales slowed down all of a sudden? If you've noticed a spike in customer churn, have you investigated the causes that may have resulted in your customers deciding not to continue shopping with you?
Every abandoned shopping cart, every lost sale, and every former customer can provide a wealth of valuable information about your company's blind spots.
Many factors contribute to "churn," which is a term that refers to the percentage of customers that stop doing business with a company. The most common factors that impact a company's churn rate are:
- The offered services are not worth the cost
- The customer found comparable products at better prices elsewhere
- The quality of products sold is poor
- The customer had a negative experience with the company's customer service department
- The purchasing process is too complicated
If you're experiencing an increasing churn rate at your business, there's actually a lot you can do to win back old customers. We've put together 3 ways of winning customers back. When combined, this three-pronged strategy will give you the best chances of building trust and regaining the loyalty of customers who haven't shopped with you in ages.
TARGET THE "BEST" LOST CUSTOMERS
Losing any customer is disappointing, but the silver lining is that not all customers are created equal. In fact, losing disinterested, low-spending customers can actually strengthen your remaining customer pool. But when high-spending, previously loyal customers decide to stop patronizing your business, the resulting loss of sales can be devastating.
As part of your strategy to target old customers for the purposes of winning them back to your brand, you'll first need to identify your lost customers, and then within that group, you'll need to figure out who among them were the "best" customers.
Take a deep dive into your Customer Relationship Management data. This CRM data could come from your Point-of-Sale system or your customer loyalty rewards program, if you have a loyalty program in place. Within the software, isolate all customers who haven't engaged with your business for at least 6 months. Then, analyze this group of customers and exclude anyone who habitually spent under $X or who purchased inconsistently. In other words, get rid of the low-spenders and unreliable customers, because you don't want to target them in your re-engagement campaigns.
The pool of remaining customers might be relatively small, but that's okay. They're high quality, and that's all that matters. You can now move on to the next step, which we'll cover in the following section of this article.
IDENTIFY WHY CUSTOMERS STOPPED SHOPPING
The ultimate goal is to launch a successful re-engagement campaign that will entice your old customers to resume shopping at your business, but we aren't quite there yet. If you jump the gun and bombard your former customers with discount codes or other incentives without knowing why they left in the first place, your campaign is not going to achieve the desired result. First, you must identify why your best customers stopped shopping.
For this reason, we recommend that you launch a targeted email campaign that's designed to solicit valuable feedback from your old customers. The trick here is to promise them a personalized reward in exchange for their honest opinions, and please make sure that the reward will be available to them as soon as they participate.
The following is a sample letter you can email your targeted customers once you've segmented them into small groups of similar interests:
Subject Line: We Can Do Better
Email Body: BUT NOT WITHOUT YOUR HELP. So, we're emailing you to find out what we can do better in order to see you at our store regularly. Yes, you, [First Name]. We value your business!
Answer this fast, five question survey that has been personalized to address your experience with our brand, and instantly redeem this [Product Name] that we found hanging out on your Wish List.
Or, (sniffle, sniffle) click the other button below and we'll say our final goodbyes.
CTA Button #1: I'LL GIVE YOU A PIECE OF MY MIND
CTA Button #2: I'D RATHER SAY GOODBYE
Link the first CTA to the survey, and be sure that once the survey concludes, the customer will easily receive their reward. And link the second CTA to an automated process to unsubscribe so that any customer who truly wants to move on can do so.
Once you've launched this email campaign and have collected surveys for a reasonable period of time, it's time to analyze the feedback and make note of the biggest reasons your old customers left. Ask yourself, can you fix what went wrong? Can you partially fix a few things that went wrong? Or can you compromise in order to satisfy lost customers?
Take the time to do what you can before you move onto the next section, which is all about designing your re-engagement campaign.
LAUNCH A "WE FIXED IT" CAMPAIGN
The biggest key to remember when designing your re-engagement campaign is that personalization is a must. In fact, we recommend that you use even more personalization than you originally used in the prior email campaign you launched to survey your old customers.
At the very least, the survey respondents should now be sorted into three groups based on their feedback:
- Group 1: Customers whose issues you were able to fix
- Group 2: Customers whose issues you were not able to fix, but you made improvements using their feedback
- Group 3: Customers whose feedback you were not able to utilize at all
For Groups 2 & 3, structure an email campaign for each group.
In the Group 2 email campaign, thank the customer for responding to the survey, list out the biggest issues that customers had which should include their personal issue, and then explain the specific improvements you've made. Even though you weren't able to fix these customers' exact issues, they will appreciate hearing about all of the improvements you did make. Conclude the email with an invitation to return to your brand by offering them a discount code or some other offer.
In the Group 3 email campaign, you can follow the same structure as the Group 2 campaign and offer a similar incentive for them to return to your brand, but be advised that the Group 3 customers will have the lowest return rate.
Finally, we recommend that you give the most time, thought, and effort to your Group 1 email campaign. These are the customers whose issues you were able to fix. Try to use as much personalization as possible in each email. Heck, we would go so far as to say that if there are only a few dozen customers in this group, you might manually send out completely personalized emails. Yes, that could be extremely time consuming, but it could also lead to instant appreciation. When old customers genuinely appreciate a brand, they will not hesitate to tell their friends, family, and pretty much everyone on Facebook about it, which means that not only will they return to your brand, but they'll also bring a bunch of new customers with them.
The most promising solution you can implement to prevent customer churn before it starts is to launch a customer loyalty rewards program at your store. Loyalty rewards programs ensure the best possible chances of retaining and engaging customers in both the short and long terms.
A modernized customer loyalty rewards program has the power to increase customer trust and lead to better sales. Whether you have yet to launch a loyalty program or your current loyalty program has fallen flat, consider using Loyal~n~Save, our omni-channel customer loyalty solution for retailers of all industries who want to increase customer retention and new customer acquisition.
Our platform comes with an advanced mobile app that consumers love, as well as a digital Swag Shop infrastructure that you can customize with your branded swag to enhance rewards incentives. Want to learn more about what Loyal~n~Save can do for your business? Contact our loyalty specialists to get started.
This article was written by Loyal-n-Save, an omni-channel customer loyalty solution for retailers looking to increase customer retention and new customer acquisition.