When I was a kid, I liked getting new toys. What kid doesn’t, right? And every time I got a new one, it seemed like the only toy in the world. I forgot all about the other toys I already had — I only wanted to play with that one.
The sales world is not that different — because of its focus on acquisition. Everyone wants those new customers, and they put all of their efforts there. But by doing so, they forget all about the customers they already have.
The problem is, you can’t let “new toy syndrome” affect your sales strategy. New customers are great, but you shouldn’t forget that other place where real opportunity lies: with your dormant customers, the ones who have already bought from you in the past.
Acquisition vs. reactivation
Companies spend tons of time and money acquiring new customers. But eventually those new customers become dormant. When that happens, most companies just go out and find more new customers. Yet that’s not really the most profitable approach.
If you have a huge dormant customer base that is being neglected, you’re leaving money on the table. And dormant customers are actually more valuable than you might think. According to research by Invesp:
It costs five times more to acquire a new customer than to keep an existing one
The probability of selling to an existing customer is 60 percent to 70 percent, while the probability of selling to a new prospect is just 5 percent to 20 percent.
Compared to new customers, existing customers are 50 percent more likely to try new products and 31 percent more likely to spend more money
When they increase customer retention rates by 5 percent, companies can increase profits by 25 percent to 95 percent.
Despite the obvious benefits, Invesp finds that only 40 percent of companies it surveyed had an equal focus on acquisition and retention — and my guess is, even less focus on reactivation.
The value of dormant customers
There’s so much emphasis these days on leading a customer through the sales funnel and closing the deal; even the term “closing” implies an ending. But the sale shouldn’t be the end of your relationship with your customers.
If a customer has purchased from you in the past, you already know you’ve done something right. This customer already knows and likes your business — enough to have actually bought from you. So, wouldn’t it make sense that he or she would be likely to do so again?
The caveat here is that this willingness may depend on your specific product. If, for instance, you sell wedding products, customers will most likely buy from you for only a limited time. But for other businesses, this won’t be the case. Your products and services can be repurchased, or one purchase may be able to lead to the purchase of another, related product.
Whatever the case, you should find it easy to identify those customers with whom an opportunity lies to sell to them again (and maybe again and again).
A smooth sales process
Selling to dormant customers can actually be easier than selling to new customers. That’s because you’ve already done so much of the legwork already. There’s no need to do any kind of lead generation, for instance, because you already have the lead, along with much of the information you’ll need to sell to these people. That would include:
Contact information: You probably already have their email, phone number and any other information you need to reach out and restart the sales process.
Preferences: Because you’ve worked with them before, you most likely have notes on their preferences or any circumstances that could influence what they buy. Plus, you know what they’ve already bought, which should give you insight into what they might buy now.
Personality: It’s possible you’ve even already developed a relationship with a return customer. Customers like familiarity, and if they know you and have worked with you in the past, they’ll be more likely to take your calls and listen to what you have to say.
Implementing a reactivation program
When you’re building out your reactivation program, one of the main things you need to learn is why these customers went dormant. Why did they stop doing business with you? Send surveys or ask directly; this will allow you to shape your strategy going forward.
While new customers are key to business growth, if you want your business to last, you also need loyal customers. One-time buyers aren’t going to be your best advocates. But those customers who keep coming back again and again are going to recommend your business to others and be exponentially valuable.
As a result, your reactivation program — you have one, don’t you? — will be your first step toward nurturing those customers who may in turn become loyal advocates.
What opportunities do you see in your business to sell to dormant customers? Share your thoughts in the comments: