Lapsed customers can be some of the best prospects for B2C companies. Why? You already know what these former customers are interested in, how much they’re willing to spend, and you can reach out to them directly because you already have their contact information. That's why targeting lapsed customers can be one of the fastest ways B2C companies can grow their bottom line (especially when compared to targeting cold prospects who have never bought your solution and you know very little about).
So, with all you know about your former customers, they can be your best "prospecting database". Yet, many businesses don’t consider winning back lapsed customers as a top priority, which is a mistake when:
Increasing customer retention by 2% has the same impact as decreasing costs by 10% (Source: “Leading on the Edge of Chaos” by Emmet Murphy & Mark Murphy)
A 5% increase in customer retention increases a company’s profitability by 75% (source: Bain and Co.)
There are lots of predictive analytic tools out there that help companies prevent attrition (i.e. tools that identify those who are going to lapse), but more importantly, there are tools that can help companies actually win back lapsed customers, so the latter is what we'll be focusing on.
Getting Customers Back on the Dance Floor
Knowing that it’s vital to win back lapsed customers is one thing. Actually re-activating customers and re-igniting the relationship is another. As the old saying goes: it takes two to tango. If lapsed customers aren’t even in the club, it’s going to be a long, long night full of solo dancing.
Fortunately, there’s a powerful new way to win back lapsed customers that is being used by B2C organizations such as those in sports and entertainment, financial-tech services, professional services and more: Predictive Lead Prioritization (PLP).
How PLP Helps Win Back Lapsed Customers
PLP uses predictive analytics to identify the lapsed customers that you have a chance to win back. PLP then compares your lapsed customers database against the profile of lapsed customers that have successfully "re-activated" in the past. This predictive modeling and analysis process produces a unique “Propensity Score,” which marketing professionals use to prioritize their efforts, and ensure that they’re focusing their resources, time and money on customers in their database who have a higher chance of re-activating vs. wasting their resources by chasing customers who are truly gone forever.
An advanced predictive analytics platform can also predict the likelihood of each lapsed customer to:
- respond through a specific channel (e.g. phone, in-person sales meetings, direct mail, email, etc.);
- respond to specific elements/characteristics of marketing (e.g. CTA color, email headline format, etc.);
- purchase a specific product or service;
...allowing marketers to know what they need to do from an execution and tactics standpoint in order to win these customers back faster. Ultimately, winning back lapsed customers is cheaper than winning over a database of cold prospects.
Important Note: Predictive Lead Prioritization (PLP) helps B2C companies the same way Predictive Lead Scoring (PLS) helps B2B companies to activate or convert leads/customers. To learn more about PLP and how to use a predictive analytics platform in your business, subscribe to our blog above!