I have to admit – I’m a fan of horror and zombie movies. And whether you like them or not, we all understand the staple of such movies. You know the scene – someone thinks the “thing” is dead and foolishly goes near. Predictably (although it still causes use to jump in our seats) the thing jolts back to life and kills, threatens or renews the chase. Interestingly, a similar scenario happens in most businesses. But instead of zombies, it’s “dead” customers. A dead customer is simply someone who used to buy from you and then stopped buying for whatever reason. Most business owners realize that reactivating dead customers can be a very effective method of improving your financial results without a huge marketing spend. Customer Reactivation Can Be Nice And Profitable – But Wait! What’s nice about customer reactivation campaigns is that you already have key information about your prospects. You know who they are so you can reach out to them. And you also know how much they used to purchase from you, what they used to purchase and what they were like to deal with. But before you launch any customer reactivation campaign, please wait. Make yourself pause, roll up your sleeves (or fire up your computer) and do some number crunching first. By jumping into a customer reactivation campaign without first doing some analysis, you may find yourself kicking some zombies and creating a nightmare for yourself instead of making more money. What To Analyze (From a Distance So That Zombie Can’t Grab You) The first thing to do is to look at how much business each potential reactivation candidate did with you prior to becoming a dead customer. They key is to look at their volume for the last two or three years before they became inactive – not just the most recent year. The reason is that customers often fade away, buying less and less over a period of time before finally becoming a dead customer. Looking only at their purchase volume immediately prior to leaving can cause you to miss some hidden gems in your customer reactivation pool. For example, a dead customer who purchased $1,000 of your products and services in the last year before they became inactive may have routinely purchased $5,000 each year prior to that. This would be a much better reactivation target than a dead customer who purchased $1,500 with you in the year before they became inactive, but that was the most they ever purchased from you in any year. What you are looking for is the potential gain in revenue (and gross profit) from reactivating a customer. Good Reactivation Or Bad Reactivation? The second thing you need to analyze is how much effort and investment each potential customer reactivation demands from you. For example, a customer who routinely purchased $3,000 of products and services before they became inactive may seem like a good reactivation target. But if that customer was an absolute pain to deal with and was slow to pay (therefore forcing you to invest emotional and financial capital into the relationship) they may not be as good of a reactivation target as you first thought. The last thing to analyze is whether each dead customer would be a good fit with your current product and service offerings. Depending on when a dead customer last had any transactions with you, your business view and approach may have significantly changed since then. This needs to be considered. For example, a dead customer who used to do a lot of business with you, and was a great customer to deal with may still not be a good reactivation candidate if you have moved your business from a low-priced provider toward a high-priced, high-value offering. Depending on their reasons for buying back then, there may be a mismatch between what you currently offer and what you were offering when they were active. Know A Zombie Before You Start Kicking It Doing this type of analysis is critical to a successful customer reactivation campaign. Getting old customers back is often surprisingly easy. You just need to ask. But before you invite them back, make sure you aren’t inviting customers who will create new problems, generate less potential than you had hoped and not help you improve your financial results (or even worse, make you worse off than before). Reactivating customers can be profitable and rewarding for your business, but it can also result in horror-movie results if you aren’t careful. So do some analysis first and then reactivate customers. Only then can you be confident that you will actually improve your financial results and move your business toward serving your dream lifestyle. Zombie Photo via Shutterstock The post “Dead” Customer Reactivation Done Right: Zombie Kicking 101 appeared first on Small Business Trends .
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