4 Ways to Help Win Back Customers

If you've lost customers, you may think they're gone forever. But with the right approach, you may have a chance to win them back.
July 15, 2016

Many merchants are plagued by fly-by customers—those who shop with you but often disappear for months on end while they spend their money elsewhere. According to a 2016 study by my company, Thanx, of customers and merchants who have used our services, 69 percent of today's restaurant and retail customers will not return in the next four months, a frightening statistic for most business owners. But these “at-risk" customers are not necessarily gone forever. You can help win them back, so long as you can identify them appropriately and have the tools to reengage them personally.

Winning back your top customers can be broken into four basic steps:

1. Identify customers that actually matter.

In today's connected world, businesses should consider building data-driven relationships with their best customers. No longer can you “fly blind," nor is there an excuse for analog marketing campaigns such as loyalty punch cards that don't return actual customer data. The metrics to know here are recency (the last time someone shopped with you), frequency (how often they normally come in) and lifetime value (how much they are worth to your business, based on average spending and longevity). With these key pieces of information about your customers, you will be better equipped to respond when something changes and they disappear on you.

But make sure you try to focus on the customers that actually matter. You can gain the most leverage by focusing on the actual loyalists—our study also found that it's the top 25 percent of customers who drive two-thirds of revenue.

2. Spot "at-risk" customers before it's too late.

By leveraging customer data and individual purchase histories, savvy merchants can identify when customers deviate from their average purchase frequency and tailor marketing programs accordingly. Unfortunately, most churn campaigns do this with blanket 30-, 60- or 90-day lapsed customer campaigns, which paint everyone broadly with the same brush. It should not take months of inactivity to know that something went wrong with your regular customers. Similarly, for many businesses with lower visit frequencies or for less frequent customers, too active of a churn campaign might simply train consumers to hold out for discounts in between purchases—the opposite of your desired effect. Sophisticated campaigns can look at every customer individually and reach out to them when they have meaningfully deviated from their behavior.

For the program to be effective, you should consider using incentives at the right time and target the right customers. Offer an incentive too early and you may be losing money on an already loyal guest. Wait too long and they may have closed the door forever.

3. Communicate personally and provide reasons to return.

Our study found that communicating with customers who were once loyal is eight times more cost effective than acquiring new ones and more likely to produce large returns. The challenge is that most guests don't share feedback or leave so much as a hint as to why they left you for another business. These “silent guests" come in, shop or eat and leave without ever saying a word. If you don't have the ability to communicate with customers and show you care, and you can't tell when they've stopped returning, you're letting revenue walk out the door. But how do you get in touch with them? Without a mobile strategy, communication with your customers will get harder and harder.

An automated customer win-back program can be an effective way to motivate more frequent visits and drive ROI.

4. Keep them loyal.

Once a customer is “won back," it's vital to keep them engaged. This is where great service, open feedback channels and a top-notch loyalty technology can help you stand out from the competition. The time to implement such programs is during the “good times"—if you wait until business is declining or you're recovering from a crisis, you may find yourself in the fly-by customer trap with no way of luring them back.

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