Client Reactivation

Factors:

1. How successful is the company right now?

Are they on the outs, at the tail end of a long downswing, slowly dying?

Or are they on a rising curve of growth, but concentrated on getting new customers and simply didn't spend enough time cultivating existing/past customers?

Obviously you want the latter not the former, because your chances of success are automatically better.

2. How much effort do you personally want to put into this project?

If you do the calling, it will be intensive effort.

If you write a letter and they send it, it won't.

And the company will be just as pleased if the letter's results are good as they would from your laborious calling.

See how this feeds back into point #1? A company in a rising market with a decent reputation is much easier to get reactivations for by a simple letter reminding the customer that this market leader exists.

The letter can be used as a testing tool; if returns are good, you can jump in with more intensive efforts.

3. What's the reward for the various activity levels?

If you are personally putting in a ton of time and energy on the project, you deserve a higher return.

Just make sure you're set up for success before you start. Imagine calling to try and reactivate past customers of a credit card processor! Awful reputations and all you're going to get is resistance and negativity.

These are the things you need to know before you take on a reactivation project.


In the mid-2000s I took over a metal fabrication shop that had a poor reputation, but was in a highly rising market. Construction was going nuts.

I called all the past customers--contractors, renovators, builders--and told them new ownership had taken over, and the slate was wiped clean; then I asked if they'd give us a chance to show them we were tops on two things contractors were desperate for: great quality and delivery on the date promised.

Nearly all of them agreed to give us a try. Six months later our problems were entirely operational: how were we going to get all of this work done? Sales was no longer an issue. We had to expand to larger digs with more staff.

The initial reactivation projects might have been small. Say a few hundred bucks for a custom 3/4" steel bracket for holding roofbeams together. But once that was successfully done, the contractor would come back with the next job, which could be an $8000 custom staircase railing. That initial reactiviation offer is important. It should be something easy to say Yes to. At the shop, I could give them the easiest offer to agree to ever: they could choose the project they wanted to bring to me. No set price. And they were desperate to find a fab shop that would do what it said it would do.

In this case, I called because a) personal relationships are critical in that business; b) I had nothing else to do but get sales when I started, c) I was personally invested in the outcome, since I was running the shop, and d) a letter would probably have just bounced off my target market in that case. Notice that I also had a lot more control on the outcome of the reactivation project than you will as an outside marketing contractor. Something to keep in mind when you're designing the offer.

Thanks. Well, I was looking at searching through business directories and finding ones that have real listings on there (and not just added automatically like you mostly see on Manta). I didn't plan on finding fast-growth companies... but basically any business services company whose profit is all incremental i.e. their costs are relatively flat, which would give me the opportunity to take a larger share. I thought 15% would be fair.

This is something I wouldn't mind doing full-time and intensively with many businesses... if I could re-activate 20 customers per week at say $500 and take my 15% share, I could make $75K a year doing this. Of course once I got the hang of it, I could hire people to help me to do this with bigger companies and make bigger windfalls.

But this is all hypothetical... and honestly I'm getting tired of working through theory, but I guess I need to be a realist and look at the most probable numbers. Maybe only 50% of what I just outlined is possible.

P.S. The 'Thanks' button doesn't show for me yet.

One of the challenges is to convince the business owner to create an irresistible offer. To get them back in the fold, create a good incentive--one with high perceived value. "10 percent off" won't do it. Ask the owner if she has something she can offer that is low cost to them, but perceived to have high value to the customer.

You can even combine incentives like:

--give away a free gift if they come in the store by a certain date.
--when they come in to get the gift, give them a book of free coupons for even more savings (if used by a certain date).

Now upsell the business owner on newsletter marketing to keep the reactivated customers from straying again. It's not the customer's job to stay in touch with the business.

To Jason (haven't read Joe's post yet):

Thanks a lot. The only thing that I'm unsure about was your last bit... I'd prefer to work on a 100% performance basis, so I can get my foot in the door and reverse the risks. If I make those calls I'm bound to get at least one sale, so it's unlikely I'll end up with nothing. And if each gig is successful, I stand to make more (potentially).

So what if I asked for 15% of every sale made? Or do you think 10% is better? The only thing I'm concerned with in your calculation is the "estimated % to reactivate". This could easily be overshot or undershot by a wide margin, and then someone stands to lose out. Plus I have no real incentive to work hard if I bag the money up-front.

Yeah, I can be a good guy and try my best, but let's honest, it would have a psychological effect on my motivation (plus if I reached a decent goal I might subconsciously half-ass the rest). You know what I mean... not intentionally, but it'd give me too much of a safety net.

To Joe:

That makes sense, but if we're talking business services it might be a little different i.e. no store or coupons. I guess the primary business could set up some package, but then if it's too low-cost I don't stand to make much, unless I take 50% or something... but then they're going to think of just doing it themselves...

Oh and charge them a fee up front, with commissions added on the backend.

I guess a base would weed out the freebie-seekers. I'm actually from the UK by the way. So I could ask for say £500 up-front (or more if the list is big) then say 10% of all sales generated including the £500 fee. That might get the best of both worlds.

E.g. £0 revenue = £500 fee
£1,000 revenue = £500 fee
£10,000 revenue = £500 fee + £500 commission

Something like that.

By the way is this something that is viable in the long run? I was thinking of later setting up referral systems and so on, though that would be impossible to track so I guess a one-time fee would be best in that case.

I'm looking for general services I can offer that can hopefully give businesses a real boost, and I want to share in the success. I have a longer-term goal, but I need money to get there... so for now I need a way to make around £100K a year... not necessarily in my first year, but after a year or two of gaining experience and traction.

I first learned about Past Customer Reactivation campaigns from Bob Serling several years ago.
He does mention that it works with as little as a 15% discount. The thing you need to be able to do is paint the picture of the value the campaign has by working through the numbers with them but also pointing out the additional sales they will make by bringing the customer/client/patient back into the fold.
I sell it as pay for results with a small deposit upfront on the commissions they will owe me so that I don't get put on the back burner. I have taken on clients with out the upfront commitment if they agree in writing to implement the campaign I provide them within 15 business days of receiving the campaign from me. But I only use that as a fall back position.
Once you get some proof in a niche leverage those successes in your marketing to get more clients and increase your upfront deposit.
Once you are doing really well in a niche you can charge an upfront retainer plus a percentage. I go for 20% but will negotiate down to get a deal done.