The client had a large customer base but limited knowledge as to the value it contained and how much more value could be generated.
Within the existing customer base, the natural reactivation rate of customers and their spend patterns were unknown, meaning that there was little idea of the genuine churn rates of the business.
There was also no ongoing monitoring of customer-based metrics in place, creating a lack of understanding about customer behaviour and trends.
We needed to understand the customer behaviour and provide the programme to address churn, along with continuous monitoring to prove the impact of the campaign and give us a mechanic to identify changes and development of the programme.
We analysed the transactional data to identify natural customer spend patterns and behaviour to establish the definition of when a customer becomes ‘Lost’.
We focused on what would be required to reactivate them as well as how they were likely to behave post reactivation.
An ongoing programme was created that assessed and analysed customer behaviour, flagging those that fitted the definition of ‘Lost’. These customers fell into a multi-staged programme designed to re-engage and drive the customer back to the clients’ outlets. Where appropriate customers were handed to the sales team.
In addition to addressing lost customers a rehab campaign was created for when they returned to grow them back to or exceed their previous spend levels.
Lapsed customer and Rehabilitation campaigns had been created and were extremely responsive to changes in customer behaviour. The intended impact of these two campaigns was re-engagement and re-education, almost treating the reactivated customer as a new customer.
The lapsed campaign and rehab campaign combined has a 6:1 ROI based on incremental increase in revenue and a response rate 4.6% over the natural response rate expected from historic behaviour.
Annualised incremental revenue (customer spend that is above what would be expected based on natural reactivation rates) for these 2 campaigns was just over £120,000 and came from a spend of around £20k for the full year, making this an extremely valuable marketing activity.