• May 26, 2022
  • By Tal Klein , chief marketing officer, Relay Network

Tips to Spring Your Dormant Customers Out of Hibernation

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Customer acquisition will always be a primary focus for businesses, but perhaps too much of that focus has been placed in net-new customers rather than reactivating dormant customers who have been hibernating since their last purchase or touchpoint. There's nothing wrong with a focus on top-of-the-funnel and new customer acquisition, but an overweight focus on new customer acquisition could be costing your business more than it stands to gain. Dormant customers have already been bought, and llowing them to remain disengaged siphons away much of the customer lifetime value on which businesses counted while acquiring them.

It's imperative to get it right when it comes to re-engaging these dormant customers and nurturing them meaningfully, along their life cyclse. Overcoming the problem of dormant customers requires a mind-set shift and careful analysis of past touchpoints to help establish a new engagement strategy that will nudge them to wake up and act.

Identifying Dormant Customers

Today, brand loyalty comes at a premium, as consumers are increasingly taking their business elsewhere after a bad experience. Recent studies have discovered that more than 75 percent of consumers have changed their buying habits in the past two years. What's more, 39 percent of consumers have either changed brands or retailers, and nearly 90 percent intend to keep exploring new options in the future.

That's why it's critical for businesses to be really paying attention to the different segments of their existing customer bases and treating each with its own unique approach. For businesses looking to reactivate their bench of dormant customers, they must first identify who's actually dormant and who has made the choice not to re-engage.

When we discuss dormant customers, it's important to note the difference between dormant and disengaged and the relationship between the two. Dormant customers might have made a purchase or registered their information with a company but then never proceed past that. Disengaged customers are similar in that they have engaged at one point, only to pull back their interest. A key differentiator is that a passively disengaged customer can become dormant, whereas actively disengaged customers purposefully choose to totally opt-out of communication from the company and make a concerted effort not to re-engage.

Knowing the differences between dormant and disengaged customers is mission-critical because we're at a time whene marketing and customer experience (CX) leaders overwhelmingly agree that existing customers are crucial for driving business ahead.

The Know-How of Reengagement

Once businesses identify who their dormant customers are, then they need to get to work putting together an action plan to re-engage with them. This must be done with careful consideration and tailored to an audience of one. Customer experience teams need to look at all previous touchpoints to identify dormant customers' challenges, issues, and priorities  and try to identify where along their life cycles their interest in engaging began to wane.

It sounds simple, but it's a concept that’s overlooked. When conducting a touchpoint analysis, it's just as important to know what hasn't worked with a customer as it is to know what did work. If the customer was active up until a certain marketing campaign, then that type of outreach should be avoided. Conversely, there should be a careful analysis of when they last engaged and leverage that data to help conceptualize next steps.

Once CX teams have put the work in to find the qualitative data that confirms the issues customers faced, then they can begin to understand why they became dormant from the customers' perspective. This is the critical mind-set shift that must be undertaken—rather than thinking about customers in terms of how many can we get, CX leaders must think in terms of how they can optimize an experience for one. 

How to Appeal to Dormant Customers

It's widely known that the cost of losing customers is much greater than the cost of net-new customer acquisition, setting the scene for why CX leaders must focus on building engagement with their existing bases. Engagement strategies need to be built on a solid understanding of the customer and what can further both the strength and quality of their relationship with the business.

This is why businesses must prioritize awakening dormant customers the right way or risk them continuing to be dormant or, worse, become actively disengaged and churning out of the sales bucket. For CX teams, this comes in the form of presenting customers with relevant content that is specific to their unique needs and issues, and nobody else's.

Ineffectiveness in establishing customer relationships means that trust, meaningful engagement and customer loyalty all take a hit. This is why now is the time for brands to take stock of their customer relationships and target them with personal—not personalized—content that meets them exactly where they are on their life cycle.

The difference here being that personalized content isn't specific to one audience—rather, it can be tailored to appeal to a wider audience. Personal content directly addresses a specific customer's needs and wants and knows exactly what the customer needs based on hard, transactional data that exists within a CRM system. For example, a personalized email from a financial institution might list a customer's first name on an email, but beyond "Hello First Name," the messaging is the same that all other customers are getting. A personal email from the same institution would understand the types of financial products the customer has already purchased and can offer deals on services to support them on their life cycle. 

Businesses struggling to drive CX and their engagement strategies should start first with customers whom they don’t need to pay more to reactivate, but they must do so in the right way. Personal, relevant content and paying attention to both what works and what doesn't can encourage these dormant customers to come out of hibernation and back into a nurturing brand relationship.

Tal Klein is chief marketing officer at Relay Network, an innovator of SaaS business feeds that drive unmatched customer, member, and employee engagement. Prior to joining Relay Network, Klein was chief marketing officer at Rezilion. He currently serves as an adviser at Shibumi, a board member at Inkshares, and a strategic adviser at Persefoni.

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