Offering Customers Incentives to Return
Whatever the reason for your customer's departure, your objective is to win them back. Enticing a customer to return means showing them that you've changed. You listened to their critiques and paid attention to what went wrong, and, most importantly, you're ready to make amends.
Many marketing experts use the lifetime value (LTV) concept to quantify what a customer represents to your company. You may also see this concept referred to as the customer lifetime value (CLTV). Basically, you determine how much money your customer spends with you over a certain period, and then, when you factor in expenses and other considerations, you know that customer's relative value.
Unfortunately, we could fill an entire book explaining lifetime value. Instead, you need to understand why it's worthwhile to invest in winning back your customers, regardless of the dollar value of that effort. Winning back customers is worthwhile for these reasons:
- Cost: If it costs you $100 to get back a former customer, it would cost at least $500 to win a brand-new customer.
- Profit: Existing customers often account for more than three-fourths of a site's revenues.
- Familiarity: Educating former customers on the benefits of your site takes less time. They're already familiar with your business, your products, and your service.
- Upselling: After you win back a customer, you're more likely to increase the average value of his or her purchase or to upsell to another level of product ...