Our latest Retail Brand Loyalty Study provides insights, statistics and top customer reactivation strategies.
- There are many reasons besides disengagement that some customers might shop a retailer less frequently than other customers.
- Your definition of a lapsed customer may actually be a type of customer classified as a Roamer.
- Certain factors drive lapsed customers to be more loyal to specific retailers.
- Customer reactivation strategies can increase loyalty and shopping frequency.
- Data, metrics and shopper preferences can help you win back inactive customers.
You’ve identified your lapsed customers and shifted them to a separate marketing stream. Or perhaps booted them out of your marketing plan altogether. But wait: Are you sure they’re truly disengaged?
The 2022 Retail Customer Brand Loyalty Study from customer.com shows that what you’ve defined as a lapsed customer may actually be what we’ve defined as a Roamer. One-third of consumers fall into this category of people who typically shop around — yet still identify specific retailers they tend to shop exclusively for particular needs. So before you start dismissing inactive customers, consider these vital facts and insights that could help you win back lapsed customers with specific customer reactivation strategies.
What is a lapsed customer?
Retailers often define lapsed customers differently, based on such factors as products offered or the impact of seasonality. For instance, grocery, jewelry and outerwear retailers would all define a lapsed customer very differently. In general, though, retailers identify a timeframe within which a typical customer would have made a repeat purchase. A lapsed or inactive customer is one who hasn’t made a purchase within that timeframe.
However, our study showed that at least some of these customers who legitimately fit a retailer’s definition of inactive actually consider themselves highly loyal to that same retailer.
There are many reasons besides disengagement that some customers might shop with a particular retailer less frequently than a typical customer. For instance:
- A customer may love Nordstrom’s shoe department, but only shop there every 18 months because the closest store is 30 miles away and she never buys shoes online.
- A customer might adore Apple products, but due to budgetary reasons can only afford to upgrade their device every few years.
- A customer may prefer the products at grocery store A, but find it too busy on weekends, so often opts for the less-crowded grocery store B.
- A customer may purchase outerwear exclusively from a particular retailer — but will only shop that retailer when it’s time to repurchase outerwear, which could be anywhere from 12 to 24 months.
The list could go on and on. The point is this: Your customer reactivation marketing strategies can’t be tone deaf to the true nature of your customers’ loyalty and motivations. It’s crucial to understand, through research and analysis, the various types of lapsed customers in your client base and the reasons behind their inactivity.
Otherwise, the communications you send these “inactive” customers will strike the wrong note, potentially frustrating them rather than encouraging a repeat visit. In these customers’ minds, they are not “lost.” They’re merely “hibernating” until the conditions are right to come shop with you again.
How do you determine lapsed customers?
As we noted earlier, our latest customer loyalty study found that one-third of any retailer’s customers are likely to be Roamers, who may be perceived as lapsed customers. They may shop around, but they also profess strong loyalty to certain retailers.
Understanding the underlying attitudes and motivations of this particular group is especially crucial. These customers do not need to be won back, but rather need to be acknowledged and respected for their loyalty.
Roamers possess some interesting characteristics. For instance, customers are more likely to swing toward the Roamer shopping personality during different stages of life, such as:
- During their early years of shopping, from ages 13-18, when the experience of shopping is new and novel
- From ages 45-54, which, for many consumers, are the more budget-conscious years while raising a family
- From ages 55-64, as consumers are settling into retirement and preparing to live on a fixed income
Women are more likely than men to be Roamers. And overall, households with children living at home are more likely to be Roamers. This may be because they find it more important to shop around for the best deals in order to make their dollars stretch to care for their family.
How do you reengage lapsed customers?
In the customer.com study, Roamers reported unique factors drive their loyalty and make them more likely to engage with retail brands. Taking these into account can help you craft reactivation marketing strategies to increase this group’s shopping frequency and encourage consolidation of category purchases.
For instance, Roamers reported ease of making purchases, convenience and ability to look up past purchases or other helpful information in my online profile or via an app as factors that prompt them to select one retailer over another. They also pinpoint lowest price and incentives to shop as important drivers.
In general, Roamers are driven more by the tangible aspects of the shopping experience, citing factors that tend toward the Practicality Dynamic.
Which retailers make Roamers loyal?
While the average retailer’s customer base consists of 33% Roamers, some retailers consistently do a good job of attracting and retaining these customers year over year. For instance, Walmart, Amazon, Target and Kohl’s top the list in 2022.
Strategies on How to Win Back Lapsed Customers
The Roamers in your customer base may be a bit more elusive than a typical lapsed customer. But strategies to retain their loyalty and perhaps increase their shopping frequency can be a highly effective component to an overall win-back strategy.
Simply understanding that there is not one type of lapsed customer can help you create multiple customer reactivation strategies that resonate with each group. For instance:
- Leverage your data to create multiple segments of lapsed customers that better reflect your customers’ loyalty and attitudes. Then create strategies tailored to each segment.
- Check your metrics to identify active versus inactive customers. For instance, interactions like email clicks, page views, active carts and recent purchases can tell you how long it’s been since a customer engaged with your brand.
- Look for repeat buyers over the years and outside your typical inactive customer definition timeframe, and create a strategy to recognize and reward them.
- Test a long-term repeat-buyer strategy. Depending on how your loyalty program is constructed, these may be customers who never earn rewards because the reward expires before the customer returns to shop. Consider a test that allows their points to carry over for some extended period of time in recognition of their loyalty.
- Make sure you have VIP benefits and experiences in place that are specifically attractive to the Roamer group in your customer base.
- Since customer service and customer experience are also triggers for Roamer loyalty, consider adding increased service levels in-store, on your website or call center, your mobile app and even social media channels so customers can quickly and easily reach someone and get a response.
- Ask customers to update their preferences so you can send them communications based on the topics they’re interested in, the channels they prefer and how often they want to hear from you.
- Personalize product and service recommendations to remind customers that you know them.
- Offer incentives with a “we miss you” campaign that offers exclusive access to new products, upcoming sales and store events, with a special discount or coupon.
- Consider trigger reminders to engage customers in between purchases.
Customer Reactivation Strategies Drive Loyalty and Retention
Customer reengagement is essential for retail marketing teams to survive and thrive. And it’s no secret that it takes fewer dollars and resources to retain customers than it does to acquire new ones. With at least one-third of an average retailer’s customers identifying as Roamers — and, in many cases, even more — this is an important group to understand. Building specific strategies to retain and engage them is critical if you want to avoid the risk of disenfranchising this important segment with your win-back efforts.
Our 2022 Retail Customer Brand Loyalty Study shares new insights and perspectives on what it truly means to be a loyal customer — and the factors driving loyalty. Our retail marketing consultants can help you leverage this information to improve your customer loyalty and retention initiatives. Learn more about our retail marketing services and solutions, and contact us at 303.986.3000 for a free consultation.