Waking Up Dormant CustomersBest Practices for Defining, Messaging,

and Reactivating Customers with Email

presents

featuring…

DAVE HENDRICKSEXECUTIVE VP, STRATEGIC SALES & PLANNING

www.datranmedia.com

IntroductionsIntroductions

ANDREA L. GULLIVICE PRESIDENT, E-COMMERCE

www.nyandcompany.com

What You Will Learn Today:What You Will Learn Today:

• How to define a dormant customer

• How to better target your customers

• How to leverage analytics to your advantage

• How to communicate to different audience segments

• How other retailers have won back dormant customers

• Tips for creating your own win back programs

Did You Know Acquiring a Did You Know Acquiring a New Customer Can Cost New Customer Can Cost 6 to 7 times more6 to 7 times more than than Retaining an Existing One?*Retaining an Existing One?*

$$

* Frederick Reichheld of Bain & Company* Frederick Reichheld of Bain & Company

Did You Know The Average Did You Know The Average U.S. Company U.S. Company Loses Between Loses Between 20 & 40%20 & 40% of its Customers of its Customers Every Year?*Every Year?*

* Frederick Reichheld of Bain & Company* Frederick Reichheld of Bain & Company

DO YOU KNOW HOW MANY DO YOU KNOW HOW MANY CUSTOMERS CUSTOMERS YOU LOSEYOU LOSE PER YEAR? PER YEAR?

a) 0-15%a) 0-15%

b) 15-30%b) 15-30%

c) 30-45%c) 30-45%

d) 45%+d) 45%+

e) What customers?e) What customers?

---POLL QUESTION #1------POLL QUESTION #1------POLL QUESTION #1------POLL QUESTION #1---

When Should You Consider a When Should You Consider a Customer to be Dormant?Customer to be Dormant?

After 6 Months?

After 18 Months?

After 3 Years?

Do You Believe These Do You Believe These Customers Are Customers Are Lost ForeverLost Forever??

They’re Not!They’re Not!

ONLY THE PEOPLE ON THE ISLAND ARE TRULY…

dor·mant (dôr m nt)

adj.1. Lying asleep or as if asleep;

inactive.

2. Latent but capable of being

activated

3. Temporarily quiescent

4. In a

condition of biological rest or

inactivity characterized by

cessation of growth or

development and the

suspension of many metabolic

processes.

dor·mant (dôr m nt)

adj.1. Lying asleep or as if asleep;

inactive.

2. Latent but capable of being

activated

3. Temporarily quiescent

4. In a

condition of biological rest or

inactivity characterized by

cessation of growth or

development and the

suspension of many metabolic

processes.

DO YOU HAVE AN OFFICAL DO YOU HAVE AN OFFICAL DEFINITION OF A DORMANT DEFINITION OF A DORMANT CUSTOMER?CUSTOMER?

a) Yesa) Yes

b) Nob) No

c) Not surec) Not sure

---POLL QUESTION #2------POLL QUESTION #2------POLL QUESTION #2------POLL QUESTION #2---

Classifying Your CustomersClassifying Your Customers

The ideal repeat customer. The ideal repeat customer. The casually loyal customer. The casually loyal customer. The one-time or

infrequent customer. The one-time or

infrequent customer.

Classifying Your CustomersClassifying Your Customers

The dormant customer.The dormant customer.

““The walking dead,”The walking dead,” as Wharton as Wharton marketing professor Peter S. marketing professor Peter S. Fader calls them in his interesting Fader calls them in his interesting study, “Modeling the Evolution of study, “Modeling the Evolution of Customers’ Service Portfolios.”Customers’ Service Portfolios.”

““The walking dead,”The walking dead,” as Wharton as Wharton marketing professor Peter S. marketing professor Peter S. Fader calls them in his interesting Fader calls them in his interesting study, “Modeling the Evolution of study, “Modeling the Evolution of Customers’ Service Portfolios.”Customers’ Service Portfolios.”

It is unlikely that you are providing It is unlikely that you are providing these customers with the type of these customers with the type of “wake-up calls” they really need “wake-up calls” they really need to to remember youremember you and and shop againshop again..

It is unlikely that you are providing It is unlikely that you are providing these customers with the type of these customers with the type of “wake-up calls” they really need “wake-up calls” they really need to to remember youremember you and and shop againshop again..

DO YOU MARKET DIFFERENTLY TO DO YOU MARKET DIFFERENTLY TO DORMANT CUSTOMERS?DORMANT CUSTOMERS?

a) Yesa) Yes

b) Nob) No

c) Not surec) Not sure

---POLL QUESTION #3------POLL QUESTION #3------POLL QUESTION #3------POLL QUESTION #3---

Simply sending more email is Simply sending more email is not the answer.not the answer.

You need to be You need to be smart and smart and strategicstrategic when engaging when engaging

dormant customers. dormant customers.

GROUP 1:GROUP 1: NEW LIST NEW LIST MEMBERSMEMBERS

GROUP 2:GROUP 2: OPENS, NO OPENS, NO CLICKS OR CLICKS OR

CONVERSIONSCONVERSIONS

GROUP 3:GROUP 3: OPENS OPENS & CLICKS, BUT & CLICKS, BUT

NO NO CONVERSIONSCONVERSIONS

GROUP 4:GROUP 4: OPENS OPENS CLICKS, & CLICKS, &

CONVERSIONSCONVERSIONS

GROUP 5:GROUP 5: NO OPENS NO OPENS CLICKS, OR CLICKS, OR

CONVERSIONSCONVERSIONS

SegmentSegment Your Audience Your Audience

But are But are not being usednot being used to to define and define and reactivatereactivate dormant customersdormant customers..

But are But are not being usednot being used to to define and define and reactivatereactivate dormant customersdormant customers..

AnalyticsAnalytics are driving are driving today’s marketing today’s marketing

decisions.decisions.

AnalyticsAnalytics are driving are driving today’s marketing today’s marketing

decisions.decisions.

Active customer Inbox Active customer Inbox

Dormant customer Inbox Dormant customer Inbox

Tailor MessagesTailor Messages Accordingly… Accordingly…

Analyze Shopping BehaviorsAnalyze Shopping BehaviorsWhen do they open?

What type of offers do they open?

When was the last time they opened?

When was the last time they bought?

What is the average number of transactions for ‘best customers’?

What does the ‘most profitable customer look like’

What does the non-buyer look like?

When do they open?

What type of offers do they open?

When was the last time they opened?

When was the last time they bought?

What is the average number of transactions for ‘best customers’?

What does the ‘most profitable customer look like’

What does the non-buyer look like?

Start a Start a DialogueDialogue

Timing is Everything!Timing is Everything!Single MomSingle Mom Busy ExecBusy Exec CashierCashier

WINNING BACK WINNING BACK DORMANT CUSTOMERS: DORMANT CUSTOMERS:

A BRAND’S EYE VIEWA BRAND’S EYE VIEW

2009 Industry Stats2009 Industry Stats• 88% OF RETAILERS SURVEYED SAID EMAIL WILL HAVE INCREASED PRIORITY IN 200988% OF RETAILERS SURVEYED SAID EMAIL WILL HAVE INCREASED PRIORITY IN 2009

2009 Industry Stats2009 Industry Stats• ONLY 35% IDENTIFIED REACTIVATION EMAILS AS ONE OF THEIR KEY STRATEGIESONLY 35% IDENTIFIED REACTIVATION EMAILS AS ONE OF THEIR KEY STRATEGIES

Has Customer Reactivation Been a Has Customer Reactivation Been a Priority in the Past ?Priority in the Past ?

a) Yesa) Yes

b) No, but it will be nowb) No, but it will be now

c) No plans to focus on it nowc) No plans to focus on it now

---POLL QUESTION #4------POLL QUESTION #4------POLL QUESTION #4------POLL QUESTION #4---

PREVENT DORMANT CUSTOMERSPREVENT DORMANT CUSTOMERS PREVENT DORMANT CUSTOMERSPREVENT DORMANT CUSTOMERS

IDENTIFY & RE-ENGAGE DORMANT IDENTIFY & RE-ENGAGE DORMANT CUSTOMERSCUSTOMERS

IDENTIFY & RE-ENGAGE DORMANT IDENTIFY & RE-ENGAGE DORMANT CUSTOMERSCUSTOMERS

TEST, TEST & RE-TESTTEST, TEST & RE-TESTTEST, TEST & RE-TESTTEST, TEST & RE-TEST

CONSIDER EXTERNAL PARTNERSCONSIDER EXTERNAL PARTNERSCONSIDER EXTERNAL PARTNERSCONSIDER EXTERNAL PARTNERS

STEP STEP 22

STEP STEP 33

STEP STEP 44

DORMANT CUSTOMER EMAIL PROCESSDORMANT CUSTOMER EMAIL PROCESS

STEP STEP 11

PREVENT DORMANT CUSTOMERSPREVENT DORMANT CUSTOMERS1.1. BEGIN WITH THE END IN MIND—DEVELOP COMMUNICATION & CONTACT BEGIN WITH THE END IN MIND—DEVELOP COMMUNICATION & CONTACT

STRATEGIES FOR ALL PHASES OF ENGAGEMENT, TO PREVENT CUSTOMERS STRATEGIES FOR ALL PHASES OF ENGAGEMENT, TO PREVENT CUSTOMERS FROM BECOMING INACTIVE:FROM BECOMING INACTIVE:

• ATTRACTATTRACT—WELCOME EMAIL STRATEGY—WELCOME EMAIL STRATEGY

• INTERESTINTEREST—CUSTOMER-CENTRIC SEGMENTATION (GEO, PRICE POINT, RFM —CUSTOMER-CENTRIC SEGMENTATION (GEO, PRICE POINT, RFM SEGMENT, TRADE AREA, CHANNEL PREFERENCE, PRODUCT/SIZE, ETC.SEGMENT, TRADE AREA, CHANNEL PREFERENCE, PRODUCT/SIZE, ETC.

• TRANSACTTRANSACT—ENCOURAGE CUSTOMER TO BUY BASED ON WHAT YOU KNOW —ENCOURAGE CUSTOMER TO BUY BASED ON WHAT YOU KNOW ABOUT HERABOUT HER

• COMEBACKCOMEBACK—LEVERAGE THANK YOU EMAILS, FOLLOW UP EMAILS SPECIFIC TO —LEVERAGE THANK YOU EMAILS, FOLLOW UP EMAILS SPECIFIC TO PURCHASE, GO-WITH ITEMS, UPCOMING PROMOTIONSPURCHASE, GO-WITH ITEMS, UPCOMING PROMOTIONS

2.2. DEVELOP TESTING & IMPLEMENTATION STRATEGY TO SUPPORT THISDEVELOP TESTING & IMPLEMENTATION STRATEGY TO SUPPORT THIS

IDENTIFY & RE-ENGAGE DORMANT CUSTOMERSIDENTIFY & RE-ENGAGE DORMANT CUSTOMERS

IDENTIFY THE POINT OF NO RETURN—BEYOND WHICH CUSTOMER GOES IDENTIFY THE POINT OF NO RETURN—BEYOND WHICH CUSTOMER GOES INACTIVEINACTIVE

1) BEYOND FREQUENCY, LEVERAGE EXISTING SEGMENTATION TO 1) BEYOND FREQUENCY, LEVERAGE EXISTING SEGMENTATION TO UNDERSTAND CUSTOMER BEHAVIOR UNDERSTAND CUSTOMER BEHAVIOR

• 1X BUYERS/MULTIS/SINGLE CHANNEL/MULTI 1X BUYERS/MULTIS/SINGLE CHANNEL/MULTI CHANNEL/LOYALTYCHANNEL/LOYALTY

2) OVERLAY AVAILABLE EMAIL/WEBSITE BEHAVIORAL DATA 2) OVERLAY AVAILABLE EMAIL/WEBSITE BEHAVIORAL DATA

• OPENS/CLICKS/CONVERSIONSOPENS/CLICKS/CONVERSIONS

• SITE ACTIVITY/OFFLINE ACTIVITYSITE ACTIVITY/OFFLINE ACTIVITY

TEST, TEST & RE-TESTTEST, TEST & RE-TEST

LISTLIST• IDEALLY A CROSS SECTION OF ENTIRE DORMANT FILEIDEALLY A CROSS SECTION OF ENTIRE DORMANT FILE• ALTERNATIVELY, SEGMENTS MOST LIKELY TO RESPONDALTERNATIVELY, SEGMENTS MOST LIKELY TO RESPOND

OFFEROFFER• GO WITH THE MOST AGGRESSIVE OFFER YOU ARE ABLE TO FUNDGO WITH THE MOST AGGRESSIVE OFFER YOU ARE ABLE TO FUND• ALTERNATIVELY, A/B TEST AGGRESSIVE OFFER VS. PROVEN WINNERALTERNATIVELY, A/B TEST AGGRESSIVE OFFER VS. PROVEN WINNER

CREATIVECREATIVE• KEEP CREATIVE SIMPLEKEEP CREATIVE SIMPLE• LET SUBJECT LINE DO THE HEAVY LIFTINGLET SUBJECT LINE DO THE HEAVY LIFTING• TEST, TEST & RE-TEST SUBJECT LINESTEST, TEST & RE-TEST SUBJECT LINES

CONSIDER EXTERNAL PARTNERSCONSIDER EXTERNAL PARTNERS

ONCE YOUR ONGOING INTERNAL REACTIVATION CAMPAIGN PROGRAM HAS ONCE YOUR ONGOING INTERNAL REACTIVATION CAMPAIGN PROGRAM HAS BEEN IMPLEMENTEDBEEN IMPLEMENTED

-PARTNER WITH YOUR ESP, CHANGE OF ADDRESS, CRM, EMAIL APPEND -PARTNER WITH YOUR ESP, CHANGE OF ADDRESS, CRM, EMAIL APPEND VENDORS TO LEVERAGE OTHER DATA ABOUT YOUR DORMANT VENDORS TO LEVERAGE OTHER DATA ABOUT YOUR DORMANT CUSTOMERS AND BUYING PATTERNS CUSTOMERS AND BUYING PATTERNS

The Win Back Take Away…The Win Back Take Away…

• DON’T DISREGARD YOUR DORMANT CUSTOMER FILEDON’T DISREGARD YOUR DORMANT CUSTOMER FILE

• TAILOR MESSAGES TO THEIR NEEDSTAILOR MESSAGES TO THEIR NEEDS

• TIMING IS EVERYTHINGTIMING IS EVERYTHING

• UNDERSTAND THEIR CURRENT PURCHASE BEHAVIORUNDERSTAND THEIR CURRENT PURCHASE BEHAVIOR

• DO NOT SNED THEM THE SAME MESSAGE YOU WOULD SEND A RECENT DO NOT SNED THEM THE SAME MESSAGE YOU WOULD SEND A RECENT CUSTOMERCUSTOMER

Thank You!Thank You!

?? !!

Q Q and and AAss

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