Fortunately, there are solutions to manage and even reverse this trend. By understanding how to use gift card, retailers can re-establish relationships with inactive customers and reignite their engagement. Here’s how!
Re-engage inactive customers with gift card
How to identify dormant customers?
Before re-engaging inactive customers, it’s crucial to first identify them.
Your CRM (Customer Relationship Management) plays a key role in this! It allows you to track purchasing habits and detect prolonged inactivity.
1 – Define YOUR inactive customers
To identify inactive customers accounts, you first need to define what an inactive customer is in the specific context of your store. This can vary from one brand to another depending on the expected frequency of purchases, the type of products, and typical customer interactions.
Once you’ve defined your inactive customer, use your CRM to segment and filter customers based on the inactivity criteria you’ve set. For example: the time elapsed since the last purchase or the absence of online account logins over a set period.
- For a fashion retailer, a customer might be considered inactive if they haven’t made a purchase in the last six months.
2 – Set up your CRM
Review historical data to understand your customers’ purchasing and engagement behaviors. A change in purchase frequency or amounts spent could indicate a loss of interest or satisfaction.
Some advanced CRMs can automatically calculate engagement scores based on customer interactions with the brand. A low score may indicate that the customer has become inactive.
Enrich customer profiles with external data that refine your customer segmentation. Interactions with your email campaigns, social media, and surveys can provide a more complete view of your customers’ activity levels.
Set up alerts or periodic reports in your CRM to track customers who fall into the inactive category. This way, you can act quickly to try to re-engage them before they become completely detached from your brand.
The role of gift card in re-engaging inactive customers
Gift card can be a powerful tool to encourage new interaction and recover inactive customers.
When included in reactivation campaigns, they can be used strategically and personally to boost engagement and encourage purchases.
Personalize the gift card to maximize its impact
Personalizing a gift card based on the customer’s interests can turn a simple gesture into a specific value proposition. This increases the chances of reactivation.
As a retailer, you can choose personalized messages to accompany the gift card, as well as personalize the amounts!
If a customer has already spent a certain amount, adjusting the value of the gift card can encourage them to spend more. This strategy can boost sales potential.
Examples of application:
- Fashion retailer? Analyze a customer’s previous purchases and then send an e-gift card that suggests complementary products. You can also offer items from new collections that match their style.
- Selling electronics? Offer gift cards targeted for the purchase of accessories based on devices the customer previously bought.
- Bookstore? Offer gift cards that suggest new arrivals in the customer’s favorite literary genres.
- Home decor store? Offer a gift card encouraging a visit to the store for a free interior design consultation with a minimum purchase.
Send the gift card at the right time
Timing the gift card send-out is crucial. Marketing scenarios can be planned around special events or significant dates for the customer (customer’s birthday, anniversary of their first purchase, etc.). This way, you personalize the customer experience and show that your brand remembers important moments and cares about the customer relationship.
For a stronger “wow” effect, send your e-gift cards during periods when customers are likely to make purchases, such as the holiday season or just before the back-to-school period!
Examples of application:
- Toy retailer? Send digital gift cards to inactive parents a few weeks before their children’s birthdays.
- Sports brand? Offer gift cards at the beginning of the sports season for your inactive contacts’ favorite sports!
Analyze the performance of your gift card to re-engage customers!
It’s essential to measure the effectiveness of your campaigns with clear KPIs. You can consider the reactivation rate, the increase in Lifetime Value, and the ROI of the gift cards used in these contexts.
Reactivating inactive customers remains a major challenge for retailers. Gift cards offer a viable and effective solution to enhance customer relationship management. Analyze your customer database, identify inactive segments, and launch a pilot campaign! By personalizing the approach and carefully measuring results, you can transform simple gift cards into powerful tools for customer retention.
