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Strategy   URGENT - Need Help Fast!  
 
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Old Dog Needs New Trick
Posted By: carter* on 9/11/2006 11:35 AM (CST) 125 Points
I have a project to raise the dead. Company x has nearly 10,000 financial customers (i.e. have purchased a financial contract or product in the past) that are dormant. They have not been contacted for quite sometime. Essentially, these customers were determined to be not that profitable to keep marketing to. Well, new management now wants to raise the dead and re-engage these one-time rejects.

This is not as easy as it may seem. With the rules and regs in place, you can’t just give them something to be a customer. Nor, can you promise things you shouldn’t.

I am simply looking for some things people have previously done to raise the dead. Maybe you have purchased a company with a bunch of clients that no one touched? Maybe you recently decided to try drumming up business from old clients that had not used you for a while.

I have a series of ideas but am looking for something unique. When answering this question please give me an idea of how effective it was and why.

Thanks!

Posted by: leslie* Member Response
9/11/2006 1:48 PM (CST)
I took a consulting position for a credit union that was drastically losing market share. A few months into it I noticed they had a lot of student loans with graduates from the local university that were still showing local contact info - however less than a few percent of this pool had attained another product. So we designed a campaign using both email and direct mail. For everyone that opened a checking, savings, cd, etc... within a 30 day time frame recieved a ($100) gift certificate to a well known local restaurant. However, we targeted only this group by mail and email. We had a 4.2% response rate. It was a relatively high cost per acquistion, however after a six month review it was deemed to be successful because the target pool were mostly all college graduates and successful so the incomes were high (and when figuring lifetime value of a twenty something with a growing salary...). It also worked into the newly laid marketing strategy as this initial number began to slowly spread word of month and a younger generation began being steadily added to the customer base. We continually (up until I left and I believe they still are) strategically targeting those "dead" customers with unique campaigns.
 
Posted by: leslie* Accepted Answer
9/11/2006 1:52 PM (CST)
Forgot to mention an important part. We held the campaign January 15th to February 15th and used a "valentines day / nicest restaurant in town" as the value proposition.
 
Posted by: DaveO Member Response
9/11/2006 5:07 PM (CST)
Sounds like the new management want sales! In my experience dormancy will drastically erode potential conversion/ ROI.
Ask yourself:
- How long have they been dormant? Do they 'look like' the kind of customers we have now?
- If they weren't profitable back then... what has changed? Has anything changed?
- How will i reach them? Will they respond to post, email or tele-marketing?

In terms of working out value
- what margin are you going to make?
- now deduct your incentive (e.g. 20% discount or cash incentive etc)
- take off the costs associated with the campaign.
Now work out what sales/ conversion you need to run a profitable campaign. Does this look like a conversion figure you can hit? If not, don't bother!
If i was part of your senior mgmt team and you said you weren't going to make any money by hitting them - I would say well done... now tell them how you are going to make some sales...

Perhaps you should try a different strategy:
Remember Pareto's "80 -20 rule" -concentrate on your top customers...
Acquire more 'valuable customers' by profiling your best customers - now go and find more like them.

Find out why these 10,000 aren't customers any more:
They could be useful - why not 'ask' them why they are no longer a customer? This can help you:
- look at developing a seperate product to meet their needs (is it price, does it serve their current needs if aimed at families - have the kids left home? If aimed at home owners have their circumstances changed?)
- or it could help you decide they aren't worth marketing to after all.

If you do decide to continue to market to them.... test your ideas - split them into segments and target them with different offers - this should help identify what turns them on.

In my experience I have never seen someone walk from the grave!! It could help you finally bury old customers and let them 'rest in peace'. Good Luck!
 
Posted by: KathySmithFilms* Accepted Answer
9/11/2006 6:08 PM (CST)
"Essentially, these customers were determined to be not that profitable to keep marketing to." Who ordered that? Donald Trump would tell this person "your fired".

Promote, promote, promote!!!

Get these 10,000 customers to "put your mind back on the mountain" when things were going well using your service or product. "That is enough to raise the dead."

Do a "Really Find Out" Survey on them (what is really wanted) and tabulate the results of what is said the most from the survey and use those words to write new promo.
The ones you then put in the "dead file" are those that put a stopper on your expansion. You will only find 2-1/2% to 20% trouble. The 80% WANT YOUR SERVICE in various levels of acceptance.
 
Posted by: darcy.moen Accepted Answer
9/11/2006 9:16 PM (CST)
Relationships change. 20 percent of the nation's customers move every year. If the list is more than 5 years old, the entire list could be bad addresses.

I used to send customer who went inactive for one year or more a 'We Miss You card'. I offered a pure 5 dollar discount off any of our drycleaning services. I don;t know what you could offer, but make it a decent offer. If any are delivered to customers, you want to make it super easy to become an active customer again.

You might want to consider adding three very important words to the addressee imprinted on your direct mail piece....be sure to add the words..... 'or current resident' Look, if the customer moved away, somebody must have moved into the address...maybe they could be a potential customer.

Address change request and return to sender requests are great ways to clean the list. That is probably needed more that raising the dead. Hail Mary programs rarely pay their own way with a ROI. Sometimes they work, but it depends on the product or service you are selling. Hope you have the margins to offset a lot of non-responses.

Darcy Moen
Customer Loyalty Network
 
Posted by: Frank Hurtte Accepted Answer
9/12/2006 9:54 AM (CST)
i suggest a get acquainted special... but dont expect massive results in your industry lots of people who have dealt with consumer credit have moved on financially and no longer need the credit
 
Posted by: KKW* Accepted Answer
9/13/2006 10:54 AM (CST)
This is tough. Your best bet may be to figure out WHY these folks were customers in the first place. What was it about your product that appealed to them?

Then figure out if that's something that would still appeal to them given the passage of time. You can promote the heck out of your product, but if it's not filling a need/want/desire on the customer end, you'll be wasting money.

I'd suggest reapproaching management with a "test" plan to implement against a small sample. That way, you're not risking so much in case the magic formula doesn't appear.
 
Posted by: telemoxie Member Response
9/13/2006 6:05 PM (CST)
I'm curious... if I'm a former customer, and you have ignored me for years - why would I have an interest in talking with you now?

Have there been fundamental changes in company culture? If so, that may be good news to prior customers. If not, I'd be careful of trying anything "long term" in nature - I would expect the bean counters will (again) pull the rug from your marketing efforts to these folks, before the project has a chance to succeed.

Be careful with the "do not call" list. Years ago, you could pick up the phone and call anyone you wanted. Today, you could be subject to massive fines from calling prior customers.
 
Posted by: carter* Author Response
9/14/2006 11:10 AM (CST)
I had my presentation today. I used several ideas you all suggested. We got the green light and now are going forward. Thank you everyone. This is a financial services company that has a series of field sales people. Those sales people had been neglecting everyone except the low hanging fruit. Management hired us as outside consultants to wake the customers that had previously been left in the dust. It is honestly a no-lose situation. I set the expectation level low (for multiple reasons) and they agreed. Wish me luck.
 


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