When was the last time you switched brands? Whether it was your broadband provider, your usual supermarket or just your toothpaste, chances are you swap one company for another fairly often.
With so many options available, changing brands is easier than ever for todayâs consumers and is almost second-nature. It makes sense then that customer churn is a significant concern for so many businesses.
So what can marketers do to prevent customers (especially high-value ones) from leaving?
Spot them before itâs too late
In the first post of this series, we talked about using your Magento data to pinpoint where your customers are in the lifecycle. To re-engage customers before they lapse, youâll need to know theyâre moving that direction in the lifecycle so you can intervene at the right time.
Yet for many businesses this is a challenge. Data is often hard to access and segmenting it into lifecycle stages can take several weeks – at which point it could be too late.
With Magento, you have the benefit of being able to access your data quite easily. The key then, is to have a platform that can use this data in real-time to segment your customers by their last purchase date and other online behaviour.
Here are a couple of things to look for that might indicate a customer is about to lapse:
- Their most recent purchase is not within the timeframe youâd expect based on your customersâ typical buyingÂ habits
- They havenât added anything to their wishlist for someÂ time
If you can supplement your Magento data with other sources, you might also consider whether:
- Their engagement with your marketing communications has slowed orÂ stopped
- Their activity within your loyalty programme has droppedÂ off
This step is important, as it not only shows you which specific customers need to be re-engaged, but can also indicate larger issues within your strategy / approach. For example, if the majority of a brandâs customers who are in the âabout-to-lapseâ stage have the same persona, this suggests that the approach to engaging this persona is missing the mark and needs to be re-evaluated.
Reach out with relevant content
Once youâve identified which customers are about to lapse, youâll want to act quickly to re-engage them before theyâre too far gone. But to really draw them back in, youâll need more than generic marketing messages – personalisation will be essential.
In the second post of this series, we looked at a few ways your Magento data can be used for personalisation, but hereâs a quick recap:
- Average order value or other purchase history data can be used to identify and engage valuableÂ customers
- Products on their wishlist can be used to send targeted offers andÂ rewards
- Products theyâve purchased before can be used to send tailoredÂ recommendations
So in the case of an âabout-to-lapseâ customer, what might this look like? Letâs say a pet supplies retailer is attempting to re-engage their at-risk customers. The majority of these customers last purchased an item from the Cat Supplies department, while the others purchased from Dog Supplies or Aquatics.
Sending a re-engagement email promoting a new range of treats for manâs best friend may re-engage the dog owners in the group, but itâs likely to drive the other customers further away.
Targeting content based on the type of pet each customer owns, though, has a better chance of encouraging them to re-engage and makes them feel that the brand knows who they are.
Go the extra mile (if theyâre worth it)
Generally, you should attempt to re-engage all of your about-to-lapse customers at least once before you let them go. But some customers will be worth a little extra effort to retain. Those who were particularly valuable to your business or were once loyal advocates might deserve a more personal touch, or an extra incentive to give your brand another shot.
Using your Magento data, you should be able to identify these customers fairly easily. Average order value is a simple but useful indicator of a customerâs value to your business. Choose average order value over total spend, as it will give you a more consistent picture of what a customerâs worth – if they spent Â£1000 on their first purchase but only Â£10 on every order since, theyâre not as valuable as someone who spends Â£150 every time they shop.
Past loyalty can be harder to quantify, but the frequency with which at-risk customers used to purchase is a good starting point. If you have a loyalty programme, customersâ past activity there can also be a useful indicator.
Once youâve identified these âVIPâ customers (and your initial re-engagement attempt has been unsuccessful), you might try:
- Having a customer service rep reach out personally to see what wentÂ wrong
- Offering an exclusive reward â for example, tickets to a private event, a free upgrade on their next service,Â etc.
- Inviting them to join your loyalty programme as a VIP member, or with a certain number of points already credited to theirÂ account
Automate to re-engage customers at exactly the right time
The most important part of re-engaging at-risk or lapsed customers is reaching out at the right time. Too soon and you might come off a bit pushy or overly attached. Too late andâ¦ well, it will be too late – theyâll already be gone. Thatâs why automating your retention campaigns is essential. Youâll need software that can pinpoint when customers move into the âabout-to-lapseâ stage of the lifecycle and reach out with the relevant content at just the right time.
Youâll also need a platform that can cut data in real- or near real-time – to build accurate segments for sending tailored content to, and for identifying âVIPâ at-risk customers.
With powerful segmentation tools and lifecycle stages built in, our Horizon platform is built for insight-driven customer retention. Our unique ELVIS Insight makes it easy to identify and engage your most valuable, loyal and influential customers. Find out more â