Lost Customer Reactivation Campaign
January 15th, 2013 // 1:49 pm @ Million Dollar Methods
If you aren’t familiar with the coffee company illy (or if you’ve only seen their cans in gourmet shops), then take some time to follow their marketing strategies. They’ve done a lot of brilliant things which offer lessons for all marketers.
Before I explore today’s example of a reactivation campaign, let me give you some background information about illy.
illy produces high-end coffee (beans, ground, packets, etc.), but what they sell is MEMBERSHIP. Their goal is to get you to sign up for auto-delivery of their coffee. One of the ways they get you hooked is by offering ridiculously priced coffee and espresso makers at a discounted priced if you commit to auto-deliver program.
For the consumers, they get a $400 espresso machine for $200 plus the convenience of automated coffee deliveries. For illy, they are acquiring the customer at loss and planning to keep the auto-delivery charges running to earn their profit.
What is especially brilliant, they are selling other company’s coffee machines in order to get their customers. The machine manufacturers get paid once while illy gets paid every month.
Now, lets get to the example at hand, the customer reactivation campaign. If you hadn’t gathered yet, I was their customer receiving monthly espresso pods for about year. To this date, I have more espresso than I could ever consume. I canceled my monthly deliveries because I ran out of cabinet space, more than anything.
I am going to breakdown this mail piece and point out the critical components for a successful reactivation campaign.
#1: Recognized the Customer as Lost
The headline on the envelope is “Rediscover the convenience of illy’s home deliver program.” I can only “rediscover” if I had once discovered, letting me know that they remember I was a customer before. Additional headlines read “Come back to…” reiterating the same point. The letter begins “Because you’ve been a valued illy a casa member…”
Most reactivation campaigns consist of the same offer everyone else is receiving except sent to past customers. A big mistake if you are serious about getting previous customers to return. You have to identify them differently, let the reader realize you know exactly who they are.
Previous customers DO want to be seen differently and can ignore generic offers. Perhaps they think “this offer only applies to new customers, so its not for me.”
#2: Make as Strong an Offer as if They were New
Often marketers take lost customers for granted. They think to themselves “If they want to come back they will,” and make half-hearted attempts at winning them over. In this example, illy offers two gifts for rejoining 1) Free coffee on the first order and 2) free set of coffee cups.
Once again, illy is willing to lose money on this sale in order to acquire the customer. How many companies make money-losing offers to PAST customers. illy understands what each customer is worth, regardless if they are brand new or lost.
#3: Eliminate the Risk
As with first time buyers, illy assumes all of the risk. Your only commitment is to pay for your second order, then you can cancel. At worst, you are buying one coffee order and getting two, plus the coffee cups.
Few customers would ignore this offer since there is no commitment and no risk; that is, if they have cabinet space to keep all of the coffee.
#4: Customized Ordering Experience
From how I order to what I order, illy lets me select what works for me. As with most direct mail campaigns, there should be multiple ways to respond. Here there is phone, web, and enclosed order form.
Additionally, I can select my free gift cups. If they only offered espresso cups, and I drink coffee – their chance of winning me back is diminished. An improvement I would make to illy’s offer is expand the choices beyond the cups (I already have cups from the first sign-up).
Finally, I can customize my order by type of coffee (medium roast, dark roast, decaf) and how its comes (whole bean, ground, capsule, pod).
Regardless of my preferences, there is an option for me. Its not a one-size-fits-all offer.
If you’ve done a re-activation campaign before, review it based on these four components. If you’ve never done one, then there is no better time than now. Simply use this are your template and you’ve got a ready-to-mail lost customer reactivation campaign.
Category : member
