It’s well known to ecommerce marketers that acquiring a new customer is much more costly than marketing to active buyers. Still, there is often little effort put into re-engaging customers who have lapsed or dropped off the radar completely. Don’t give up on customers you think may be lost. The Harvard Business Review cites three reasons companies should focus more energy on lapsed customers.
- Lost customers have demonstrated a need for your products, making them far better prospects than acquiring brand new buyers.
- They are familiar with your ecommerce store, eliminating the need to create brand awareness, thus reducing the cost of marketing.
- New technologies allow companies to draw on information about buyer behavior the first time in order to craft more-successful win-back offers.
By reaching out and motivating them to return, you have a chance to turn lapsed customers into valuable, loyal buyers and increase your bottom line.
Importance of Lost Customer Data
1. Cost Effective Marketing
It can cost 4 to 10 times more to acquire a new customer than it does to retain shoppers who have previously made purchases. This makes your lost customer segment a valuable target market.
2. Opportunities to Re-Engage
Lost customer data allows you to launch win back campaigns to re-engage lapsed customers. With accurate lost customer data you can personalize campaigns with precision based on your customers’ past preferences. Win-back campaigns should give lapsed buyers a reason to return by adding a coupon or discount code. Discounts for lost shoppers should typically be worth more than what you would send your regular or active customers.
Lapsed customers who have been inactive for a long time may need more incentive than others who may have been gone for the season. You can also re-engage inactive shoppers by introducing them to new products or services in your online store.
Read more here for additional tips on win back email campaigns for each stage of your customers.
3. Identify Product Performance
If you can drill down into your lost customer data and find out what products they purchased, you may uncover trends in poor product performance as a potential reason that customers are not returning. If you find many of your lost customers purchased some of the same types of items, it may be time to re-evaluate the quality or pricing, or decide whether to discontinue carrying the product.
How to Find Lost Customers
The simplest approach to identifying lost customers is to track the amount of time since they made their last purchase. Depending on what you sell, you’ll need to determine how many days or months since a purchase qualifies a customer as ‘lost’. Another approach to finding lost customers is to use RFM analysis, or Recency, Frequency, Monetary. RFM classifies customers into segments based on the average frequency of their purchases, the total amount they spent and the date of their last purchase.
Find Lost Customers Easily with Glew
Glew’s advanced analytics platform takes the time and guesswork out of finding lost customers. Glew identifies Lost, At Risk and Active Customer segments by using a proprietary metric called Lapse Point. This helps you identify the average number of days it takes for a one-purchase customer to buy again. Anyone within that window of time is Active, and those that approach the Lapse Point are At Risk. Lost customers are those who may have passed beyond the window of opportunity and could use targeted win back campaigns. Within Glew, you can easily access and analyze customer data in three customer segments. Time Based Segments includes data on all of your lost customers, as well as at risk customers, active customers and more.
Within the Lost Customer segment, you can also analyze patterns in performance and products purchased. This could help you determine why customers left in the first place. This data also enables you to send incredibly targeted win-back campaigns. You can offer discounts on products they have previously purchased, cross-sell or upsell based on past purchases, or discounts on products that need to be replenished. Every store’s customer buying cycle is unique, so having this data at your hands allows you to adjust your marketing campaigns accordingly.
The Customer Dashboard in Glew also includes Customer Based Segments and Order Based Segments. Customer Based Segments group buyers based on their spending habits including full price customers, value shoppers and more. Order Based Segments show segments around order behavior including repeat customers, high average order value, refunders and more. With Glew, you can also drill down into individual customers to see a full history of purchases, attribution and contact information. You can also view whether the customer is active, lapsed or lost.
In addition to customer insights, Glew gives ecommerce stores insight into hundreds of areas in focus areas including Performance, Merchandise, Cost of Goods Sold and Reports. If you want to find profits and opportunities hiding in your data, get started now with Glew. Try it free for 7 days. Set up is easy and integration is a breeze. Click here to get started with your free trial.