How to Re-Engage Lapsed Customers: A Guide for E-commerce Brands

In the competitive landscape of ecommerce, customer churn is an unavoidable reality as customer loyalty requires an incentive or reason to exist. Even the most successful brands see once loyal customers fade away – it's a natural part of the customer lifecycle. However, these lapsed customers represent a significant drain on your revenue and limit potential growth. Reacquiring them can be a challenge, but it's a far more cost-effective strategy than focusing solely on new customer acquisition.

This is where understanding your customer's behaviors, alongside personalized win-back campaigns and flows, can increase your customer lifetime value (LTV) and help build better, longer lasting relationships between your brand and customers.

Let's define win-back campaigns as targeted, strategic efforts to re-engage customers who haven't made a purchase in a significant amount of time (usually 3-6+ months in order for them to be classified as lapsed).

Think of them as a second chance to rekindle the relationship and bring those once-loyal customers back into the fold. The key to success here? Personalization. Generic blasts won't cut it. your approach has to show lapsed customers that you remember them, value their business, and genuinely want them back.

The following article covers how to define, identify and win-back lapsed customers for e-commerce brands.

Why do customers become lapsed?

While attracting new customers is crucial for ecommerce growth, neglecting lapsed customers leaves untapped revenue on the table. Before getting into how to win them back, it's essential to understand why they might have drifted away in the first place.

Here are some common reasons:

• Dissatisfaction: Perhaps a product didn't meet expectations, there was an issue in the customer service experience or shipping was frustratingly slow. Unmet needs can cause customers to seek out alternatives.
• Changing Preferences: A customer's needs and tastes evolve over time. Products that once held great appeal might become less relevant, prompting them to explore other brands that better fit their current lifestyle.
• Price Sensitivity: Special offers and introductory discounts can attract customers, but if your long-term pricing model isn't competitive, they might jump ship when those promotions expire.
• Inbox Overload: Shoppers today are bombarded with emails. If your messaging gets lost in the noise or feels irrelevant, it may lead to customers disengaging, and eventually lapsing.
• Simple Forgetfulness: Life gets busy! Sometimes, despite the best intentions, customers simply forget about your brand, especially if there hasn't been recent interaction.

Feedback plays an essential role in helping figure out which of the above reasons apply to your customers. Direct surveys, analyzing past behavior (browsing patterns, purchase history) and reviewing existing feedback (positive and negative) all provide valuable insights that help you...

Tailor Re-Engagement: Craft win-back campaigns that directly address potential pain points and reignite a lapsed customer's interest.

Prevent Future Churn: Feedback data can reveal trends. Do many customers lapse after a particular time period? This could indicate a need to adjust your onboarding or retention strategies.

Improve Customer Experience: Analyzing negative and lapsed customer feedback pinpoints weaknesses in your brand's offerings or customer journey. This data allows for improvements that increase customer lifetime value (LTV) and reduce churn across the board.

Winning Back Lapsed Customers

A generic win-back campaign won't really cut it in today's competitive ecommerce landscape. To reignite interest and boost your customer lifetime value (LTV), personalization and making sure messages resonate is key.

Remember, lapsed customers need a valid reason to come back – show them that you understand their needs, value their past business and are genuinely interested in winning them back as loyal customers.

Segmentation is Vital

Targeting lapsed customers based on key data points lays the groundwork for highly effective hyper-personalized campaigns. The more detailed data you have on a customer and their journey with your brand, the more likely a message is to resonate on an individual and personal level.

Some useful segments here would be - 

• Past purchases: Understanding their prior interests allows for relevant product recommendations and messaging.
• Time since last engagement: This helps determine the level of re-engagement effort needed. A more recent lapse may warrant a gentle nudge, while longer absences may require a stronger incentive.
• Identified Reasons for Lapsing: If feedback is available, use it to tailor win-back campaigns that directly address the issues that led to the customer drifting away.

Emphasize Hyper-Personalization

Go beyond basic greetings and generic offers to truly win back hearts (and wallets).

True hyper-personalization or however close you can get to it, across your outreach makes every lapsed customer feel understood and valued and gives them a genuine reason to come back.

Here are use-cases of hyper-personalization being implemented well - 

• Use the customer's name: Include it in subject lines, email greetings, and even the SMS follow-up, showing you remember them individually.
• Acknowledge their absence: Phrases like "We've missed you" in the email or "We noticed you haven't shopped in a while..." in the SMS demonstrate that you care about their continued engagement. Consider using location and weather data to personalize the greeting further. For example, "How are you enjoying the pleasant NYC spring lately?".

• Address Potential Pain Points: Utilize feedback data, if you have it. Did a past review mention slow shipping? Reference your improved shipping options. Was a product not quite what they expected? Highlight similar items or improved versions.
• Tailored Product Recommendations: Don't just blast new arrivals. Curate product suggestions based on their purchase history – this shows you understand their preferences. For example, "How are you liking the cozy jacket you bought from us over Christmas? We think you might love these t-shirts to go under your jacket!"
• Personalized Incentives: Offer coupons or free shipping strategically, only when it feels truly necessary to reignite interest. A personalized "SARAH20" is more impactful than a generic sale.

Pro tip - Having a "brand ambassador" or someone from your team reach out, as an individual with their name in the email, will help a considerable amount in making your efforts seem genuine. 

LTV.ai helps you achieve this exact personalization (location, previous feedback, personalized product recommendations, personalized coupons etc) across your email list to make customers feel valued and increase owned channel sales by 10-25%.

Multi-touchpoint Approach 

The next step for cutting through the noise and staying top-of-mind with lapsed customers is utilizing a multi-channel and multi-faceted approach that goes from Email to SMS and back.

Combining Email and SMS (especially with a brand ambassador or personal shopper on both) gives your brand more touch-points, enhancing trust and increasing the likelihood of your messages being seen and acted upon.

Here's how to approach an omni-channel strategy:

Personalized Email: This is your space for a comprehensive re-engagement effort. Capitalize on the hyper-personalization strategies outlined earlier:

1. • Acknowledge their absence.
   • Address potential pain points from past feedback.
   • Offer compelling product recommendations tailored to their preferences.
   • Include a personalized incentive, if needed, to drive action.
   • Craft a catchy subject line that incorporates personalization, urgency, or curiosity (e.g., "We miss you, Sarah! Check out what's new..." or "Did something go wrong, John?").
   
   

   Strategic SMS Follow-up: A few days after the email, send a short, impactful SMS to provide a gentle nudge. Keep the core message consistent with the email's offer, but tailor the language for the SMS format.

2. Here are some approaches to take for this SMS follow up - 

   • Reference the email: "Did you get our special offer for you, [Customer Name]?"
   • Urgency and scarcity: "Following up on my earlier email, your [Discount code] expires soon!"
   • Direct call to action "Just wanted to remind you that we released our new collection, shop now and save!"

The key here is to avoid repetition across email and SMS. Use both channels to create a conversation that draws them back in, showcasing your brand from different angles and maximizing opportunities for engagement.

Even without immediate action, this multi-touchpoint persistence reminds lapsed customers you're still there, building brand awareness that can pay off later.

Subject Lines Make the First Impression

Your win-back email subject line is crucial for grabbing attention in a crowded inbox. It needs to spark curiosity, urgency, and demonstrate the personalization within.

To get your creativity flowing, here are a few examples of subject lines in the context of winning back lapsed customers - 

• Personalization that stands out

• • "We've missed you, Sarah!"
  • "Your [brand name] favorites are back in stock, Alex"
  • "John, [product name] to match your [last purchase item]"
• Urgency and scarcity
  • "Your special offer expires soon, Jacob"
  • "This limited-edition item won't last"
  • "Don't miss out on your exclusive deals"
• Intrigue and curiosity 
  • "A Surprise inside for you!"
  • "Something exciting just for you..."
  • "Can we help with anything, John?"
  • "A special deal for you, Amy"

Demonstrate Genuine Care

When you put yourself in the mind of a lapsed customer, you'll learn that all you would need is to know that a brand truly cares about you, is concerned and wants to improve your experience. Even if this isn't enough to get you to convert, it will mostly be enough for you to reply.

The most efficient ways to show your brand genuinely cares are as follow - 

• Addressing Feedback Proactively: If past feedback (reviews, surveys) suggest potential pain points, acknowledge this directly in the subject line or email body.
• Showing you value their return: Emphasize their importance to your brand by personalization, tailored product recommendations or simply letting them know that they matter and you want to know what went wrong.

The Win-Back Sequence

A well-thought-out sequence that implements the strategies discussed is key to winning back lapsed customers.

We recommend running a dedicated win-back campaign on your lapsed customer for 4-6 weeks, with 2-3 emails per week. If a customer remains inactive after this period, consider removing them from your email list.

Here are a few example sequences to provide inspiration:

Sequence 1: Feedback-Driven

• Initial Email: Ask how they've been and request feedback on their last purchase.
  • Once They Reply: Address feedback directly, offer a tailored product recommendation.
    • Follow up: Highlight any changes made based on their feedback.
  • If theres no Response: Offer a personalized product recommendation.
    • Final Attempt: Offer a discount coupon as an incentive.

Sequence 2: Direct and Personalized

• Initial Email: Ask how they're doing and offer a tailored product recommendation.
  • No Response: Ask for feedback and how you can improve their experience.
    • Final Attempt: Offer a personalized coupon code to encourage conversion.

Throughout the campaign, send valuable follow-up emails with content related to past purchases (style guides, product care tips), or testimonials showcasing happy customers.

Important Note: Tailor the frequency of your sequence based on how long the customer has been lapsed. More recent lapses may require a faster cadence, while longer absences may need more space between emails.

Track the results of your win-back campaigns carefully, analyze open rates, clicks, conversions, and any feedback received. Use this data to refine your subject lines, email content, offers and the overall sequencing for even greater success over time.

LTV.ai runs hyper-personalized reactivation sequences on your lapsed customers, that change depending on each customers independent journey and lifecycle, to win back 1-5% of your entire lapsed customer list.

Wrapping Up

Reactivating lapsed customers is a vital strategy for ecommerce brands seeking to maximize customer lifetime value (LTV) and sustainable growth.

While customer churn happens, a strategic approach focused on understanding the reasons behind churn, segmenting your audience for targeted messaging, hyper-personalization and utilizing multi-touch campaigns is essential to bring these valuable customers back into the fold.

Remember, it's not just about regaining a sale; it's about rebuilding trust and fostering a lasting relationship with those who have shown an interest in your brand.

How Ministry of Supply used AI to re-engage their Lapsed Customers

A leading menswear brand, Ministry of Supply, was having issues with the relevance of their emails and thus not being able to truly connect with and convert all of their customers, despite detailed segmentation and triggers.  

To combat this, they tested out LTV.ai to see how the addition of AI into their marketing stack would impact their repurchases, customer loyalty, customer satisfaction and LTV. The results were better than expected... 

The Goal?

The overarching goal was to re-engage customers that hadn't purchased in 180+ days but had made at least 1 purchase with the brand historically.

These lapsed customers were incredibly valued individuals that had been lost by Ministry of Supply and they wanted to show them they cared and wanted them back. 

LTV.ai's Strategy?

LTV.ai sent a sequence of 5 text-based emails from a "brand ambassador" dedicated to these lapsed customers, mentioning variables like their physical location and previous feedback and offering personalized product recommendations based on their previous purchases.

These emails also featured dynamic coupon code usage, meaning customers only got coupon codes if they were proving incredibly difficult to re-engage. When coupons were offered, they were hyper-personalized ("AMY15" for 15% off) and varying levels of discounting was testing for different customer segments (some got 10% off, while others got 25% off). 

LTV.ai's AI also held conversations with customers over email, to nurture the relationship and help guide them towards the next purchase that would be perfect for that one individual. 

The Results? 

LTV.ai's impact was impressive:

🟢 $0.91 revenue per unique lapsed customer

🟢 +9.93% conversion rate

🟢 11.59% of total brand revenue driven by LTV.ai

🟢 20x ROI

Apart from this, LTV.ai also: 

🟣 Sent hyper-personalized text based emails, with personalized product recommendations, that customers loved

🟣 Held 100's of AI driven conversations over email to nurture customer purchases

🟣 Only offered coupon codes when necessary to maximize margins

🟣 Gathered tons of feedback directly from customers to stop future churn before it occurs

Full case study here.