As a small business owner, you may spend a lot of time and resources attracting new customers and this is important to do. However, there may be a rich vein of gold neglected in your own backyard, while you are busy prospecting elsewhere. It’s a strategy called past customer reactivation. The larger companies are catching on but most smaller companies have not yet done this.
If your business is 2 years old or older, chances are you have customers that did business with you in the past, but have not purchased from you for a while. Usually, this is not because they were unhappy with your product or service but simply because they forgot about you.
A friendly reminder, in the right format and using the right kind of language, has been shown to generate sales and instant profits, sometimes providing a huge boost in revenue.
The Customer Reactivation Method
1) Pull from your database all customers that have been inactive for 6 months or more, but not over 24 months old. These will be recent enough to remember you but inactive for long enough to respond to your letter.
2) Develop a white paper or report offering helpful advise to your target market on a subject of interest to them. This will be a free downloadable PDF that they can get just by going to your website.
3) Select an appropriate product or service to offer at a discount to your inactive customers as a token of your appreciation and to generate instant sales.
4) Craft a simple one page letter, apologize for being out of touch and offer them the free report and discounted product. If possible, use as a template a letter format proven to produce results in various markets. The letter that we use has been tested backwards and forwards and flat out works. We will write this letter for you to include your own offer using this proven template.
5) Find an inexpensive mailing house for printing and sending a one page letter, to reintroduce yourself and your service. [Note: Email campaigns are also possible and can work but is far less responsive than direct mail. The increase in sales more than makes up for the printing and postage costs – about 80 cents total per using the sources we provide you]
6) Set up a custom landing page that allows tracking of these sales through your website. Your webmaster should be able to handle this easily. In your letter, include this custom URL for easy tracking.
This Method Gets Results
Your results may vary but most companies find that at least 30% of inactive customers respond to this type of offer and sometimes response is much higher.
Here is an example campaign using a lower figure of 20%, just to be on the conservative side and using a list of 10,000 inactive customers for easy math. You can estimate your own potential revenue using this formula below:
10,000 inactive customers x .20 = 2000 sales x $150 (average sale value) = $300,000 in new revenues
Less printing and postage (est $6,400) and your overhead and you can calculate your net profit.
Plus, this does not include the additional repeat sales to these customers once you have them back buying from you, and not your competition.
Kaizen Marketing offers full consulting and management services to help you reactivate as many past customers as possible. We help with all the steps outlined above, including writing the letter for you, based on proven language used successfully in previous campaigns. Our fee structure is a small retainer plus a small % of the gross sales for our services. Such a campaign can be run once per year and may represent a significant increase in sales for that year, depending on your business.
Please contact us to schedule a meeting by phone to get started.
Looking forward to working with you soon!
Founder, Kaizen Marketing Service