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As many retailers know, customers aren’t always ready to buy after their first interaction. And even those who do check out on the first interaction may be open to making a future purchase or signing up for a loyalty program, driving more revenue for the brand over time.
That’s why re-engagement strategies are so essential to business growth. With the right insights and approaches, enterprises can boost initial sales and foster repeat business that increases a customer’s lifetime value – helping drive revenue, brand loyalty and other metrics more efficiently.
From membership rewards to AI-powered campaigns, we’ll explore proven and emerging options for using re-engagement as a pathway to growth.
The first step to building effective re-engagement strategies is conducting a customer behavior analysis. By gathering data about how customers behave in various stages of the purchase journey, enterprises can better understand their shoppers’ preferences and identify opportunities to re-engage them, driving more effective and efficient customer growth. Most businesses know intuitively that in today’s hypercompetitive landscape – where consumers have abundant choice – it can be laborious and expensive to acquire new customers, known as customer acquisition cost. The ability to convert that customer not only initially, but repeatedly, can help drive up the lifetime value of that customer and effectively increase the return on that customer acquisition cost.
Understanding how customers are engaging initially is foundational for building focused and successful re-engagement plans.
Once businesses have a comprehensive understanding of customer behavior, they can re-engage their audiences with winning, data-backed tactics.
The first key metric businesses will want to calculate is their rate of cart abandonment, to find what percentage of customers are adding items to their cart but not completing a purchase. If, for example, you find that customers are abandoning their cart after your site presents shipping costs, you might consider surfacing those costs earlier or baking them into the price. As the Baymard Institute reported, based on data pulled from 49 different studies, the average online shopping cart abandonment rate is higher than 70%,1 with many customers deserting their carts because of added costs, long checkout processes, and poor shipping options.
Developing an action plan around that customer data is a fundamental next step. If a business analyzes customer purchase frequency – which is how many times current customers purchase within a given period – and finds that Gen Z customers purchase a product more frequently than Boomer customers, you might create a plan where you engage Gen Z customers by email once a month, and Boomer customers once a quarter.
Ideas to consider include:
Use your data to reach customers with personalized campaigns that meet their needs and appeal to their interests.
Before building out personalized campaigns, it's essential for businesses to measure their baseline engagement levels, so they can measure the impact of any specially tailored campaigns against the baseline metrics. Analyze the data to understand which platforms see the most customer engagement – mobile apps, websites, social channels, and email? Which audiences and demographics have the highest and lowest engagement levels?
These campaigns might include:
Targeted emails
Segment your subscribers by different criteria and characteristics, such as demographic, engagement level, membership tier, and content interests. Then reach each audience segment with targeted emails that match their preferences.
For example, you might send re-engagement emails just to people who've abandoned their carts, encouraging them to come back and complete their purchase before products sell out. You might also use win-back email campaigns that re-engage lapsed or inactive customers.
Tailored product recommendations
Leverage data from customers’ purchase history to deliver personalized product recommendations that might bring them back to your online or in-person store. For instance, you might cross-sell customers who buy fashion apparel or technology gadgets with accessories that complement those past purchases or upsell them with exclusive looks and new product releases in a similar category.
According to research by Salesforce, 65% of consumers say they will stay loyal to companies that offer more personalized experiences.2
These personalized experiences may not only help drive new sales but also increase average order value (AOV).3 Average order value is a metric that measures the amount of money customers spend on each purchase. Businesses might want to cross reference the demographics of their customers with their average order value buying patterns. For instance, do certain demographics spend more than others? Who are your highest and lowest spenders?
Another key metric for businesses to track is Customer Lifetime Value (CLV). How much total revenue does your business earn from each customer? Which customer groups generate the highest and lowest lifetime values?
Create a cohesive customer journey by re-engaging customers across their favorite platforms — including your mobile app, website, and social media pages.
Social commerce is on the rise, allowing customers to shop for products and make purchases right from their social media apps. That means retailers can reach customers with retargeting ads on TikTok, Facebook, or Instagram and direct them to a social marketplace, where they can complete their transaction in just a few taps.
Enterprises can also re-engage shoppers with SMS marketing strategies. Customers can opt in to receive text alerts about new products, discounts, and sales that match their interests. They can then click a link within the text to learn more and check out on the brand’s app or website.
Businesses can make the mobile buying process even smoother by using a payment platform that securely saves customer information and payment preferences for repeat purchases. Ask yourself, do you know if your customers prefer to pay via credit cards, alternative payment methods like digital wallets, cryptocurrencies, or buy now, pay later options?
Lifestyle appliance brand BlendJet, for instance, knew that mobile devices accounted for 90% of their transactions,4 so they used PayPal Checkout to provide new and loyal shoppers across the globe with a fast, trusted, and frictionless way to pay on mobile devices. Now PayPal Checkout represents one-third of BlendJet’s total sales.5
Re-engagement campaigns aren’t one-off initiatives. Businesses can use these campaigns to continuously reach customers with compelling content throughout the buyer journey, doing their part to reduce churn rate, which is the percentage of customers that a business loses over a period. Re-engagement campaigns can inspire customers to take the next step in the purchase process.
That’s the tactic Expedia Group™ Media Solutions pursued recently. In partnership with PayPal, they used data insights to launch a three-part strategy. First, they inspired customers to consider travel through social media posts that led to a dedicated campaign landing page. Then, they helped customers plan their trip with native ad placements on Hotels.com and Expedia. Finally, they encouraged customers to book their travel by promoting popular destinations on property detail pages. This multi-faceted strategy ultimately achieved a 110x return on ad spend (ROAS) – a notable 51% higher than the previous campaign.6
Incentives and rewards can help customers feel valued, providing them with ways to save money, access exclusive discounts, and make repeat purchases. Research has found that members of loyalty programs on average spend up to 40% more than customers who aren’t members,7 while 63% of US consumers surveyed consider built-in loyalty programs important when it comes to the research and buying experience.8
Enterprises can use tiered loyalty programs, for instance, to reward customers with points or cash back each time they buy. Customers can then use these rewards to redeem discounts, gift cards, or other exclusive offers — so they can stay engaged with the brand and continue saving up for future perks. One Omnibus study, for example, found that Gen Z and millennials are most likely to feel they’re “getting something for free” if they buy a gift using rewards.9
Businesses might also provide referral incentives, inviting their most loyal customers to become brand advocates in exchange for rewards, such as a percentage off the price of their next purchase.
Special offers
Deliver personalized push notifications, ads, or on-site offers highlighting special deals or promotions for certain customers. On each customer's birthday, for instance, you might invite them to receive a free product or 20% off their order.
Enterprises can re-engage dissatisfied or disengaged customers by providing exceptional customer service. Whether customers are looking for help with issue resolution, finding the right products, or troubleshooting their purchase, businesses should be prepared to meet them with prompt and personalized assistance.
In fact, retailers shouldn’t just be able to respond quickly to customer feedback and concerns. They should use data and insights to proactively anticipate potential issues or questions and re-engage customers with helpful information before and after they make a purchase. For example, a retailer might send post-purchase emails to customers with instructional videos on how to best use or set up their new product. Or they might provide alternative product suggestions to customers who've made returns.
Enterprises can use the latest AI technologies to automate and optimize the strategies outlined above, improving efficiency and enhancing campaign results.
PayPal’s new offers platform, for example, gives businesses the power to retarget customers with personalized offers driven by AI. Businesses can reach shoppers with product AI-powered recommendations and cash back rewards directly in the PayPal app. Or they can integrate these offers into customers’ Smart Receipts, which allow shoppers to track their purchase and help merchants predict what consumers may purchase next10 — keeping the conversation going right after checkout.
These solutions are powered by PayPal’s global data set, helping businesses to re-engage customers based on detailed purchase histories and cross-platform experiences — so the customer journey can continue to repeat and evolve in a way may lead to increased revenue.
Discover innovative ways to re-engage your customers with the new PayPal advanced offers platform.
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