Timothy Mutsikwi Markets ANALYSTS
One would admit that when news about the covid-19 pandemic outbreak hit our screens on this side of the earth in January 2020, nobody thought the monster would still be around two years later.
The past two years have made the business environment unpredictable as it has largely been interrupted by lockdowns that would almost put a pause to the activities and efforts that organisations would make towards recovery.
This situation has however slowed down economic growth as some businesses closed shop and some are still in the jinx of trying to find ways to make the best of the “new normal” and move with the digital wave.
As a result of these and other factors, the consumer purchasing behaviour has shifted tremendously due to the erosion of their income which for the past two years has been caused by either loss of work through business closure, retrenchment or simply low business.
There are obviously a lot of questions that need to be answered by business leaders in the year 2022 going forward as business is no longer as usual.
The customers’ mindset and expectations have significantly changed from how they were two years ago.
In instances where product price was usually not a topical issue, suddenly it has become an issue due to the depletion of customers’ buying power.
Some businesses have lost a sizable number of customers who have been loyal to their brands for years in search of affordable options and have switched to competing brands.
More so, today’s customers’ attention gets easily pulled in many directions because of the availability of too much information and ads with seemingly better offers that they come across every day and while customers are being distracted by other brands, brands are also being distracted by other customers.
The outbreak of Covid-19 has affected how companies allocate their annual budgets and in some cases few-to-no resources are now being allocated to customer acquisition and retention activities resulting in organisations being burdened with high customer turnover.
In order to survive yet another seemingly uncertain year promulgated by the continual existence of Covid-19 that is persistently disturbing the business environment, organisations need to come up with strategies to win back lost customers in order to boost revenues and margins.
The American Marketing Association (AMA) says that the costs of reaching out to lost customers are in most cases far lower than the costs of acquiring new customers and, the chance of winning back a lost customer is up to eight times greater than of gaining a new customer.
In its essence, a customer win-back strategy is a marketing activity.
Its focus is on re-engaging the lost customer.
The goal here is to extend the customer’s overall lifetime value and increase their association with your brand.
It may be tempting to consider these strategies merely in terms of offering discounts and or having new innovative products as customer win-back strategic options and yet that should not be the case.
Organisations need to have an internal coordinated approach in motion to win-back lost customers and below are some of the key strategies to consider:
Customer engagement through feedback.
Organisations should take initiatives to engage their active customers instead of waiting for them to lapse.
Put a lapsing identity on customers that no longer trade with you after a certain period of their absence from your business radar and contact them through requesting feedback.
Select one or more communication channels to use and conduct a survey with the feedback you seek to request and incentivise it for greater participation.
After this, always follow up and thank your customers and give them their promised incentive.
These could be loyalty points, and or new product samples. If it happens that you received negative feedback, find ways to address it as it may worsen the relationship further if it goes ignored.
Invite lost customers to your loyalty programme.
If as an organisation you are able to identify a section of lost customers who have not been part of your loyalty programmes, you might just have uncovered a treasure house for your customer win-back strategies and business.
Due to different circumstances, some of them might not be aware of the programmes, and or may not realise how valuable the programmes may be in exchange for their loyalty.
In your communication with them, send them a too-good-to-miss invite and take them through the benefits.
Remember the drill, “customers don’t buy products, they buy solutions to their problems, they buy benefits obtained from using the products’’.
Articulate the benefits to them in simple terms and again offer them incentives for signing up to the programmes.
Persuade or lure customers with special offers.
As a business you do not need to start your customer win-back strategy through offering discounts.
This might cause your already existing loyal customers to have different feelings that include feeling unfairness of treatment if they are to be excluded from getting discounts and if they are to pay more for products than what a lost customer pays.
Organisations should endeavour to tailor the incentives according to the customer profile and habits.
Personalised offers are more effective at luring back the customer and increase chances of revenue growth.
Retarget website and online advertisements.
As much as physical business premises need walk-in traffic, websites depend on web traffic as well.
Organisations should drive lost customers back to their digital platforms using retargeting ads.
The ad may drive them to a new product, but also consider directing them to a relevant upcoming event.
Make efforts to have the ad relatable to them and make it focus on products that match their historical purchasing pattern so that it catches their emotion.
Winning back lost customers is not a once-off activity.
It calls for organisations to deploy a well-resourced team that deliberately carry out never-ending tasks and engage into processes that minimise customer turn over.
In 2022, make it a habit, revisit your database and harvest those lapsed customers and re-engage them as they may hold a key to increase in profit margins which completes the success and survival puzzle for most organisations especially in this Covid-19 pandemic.
- Mutsikwi is a Marketing Professional and he is currently the Public Relations and Marketing Officer at the Institute of Chartered Accountants of Zimbabwe (Icaz).