Definition
A former buyer refers to a customer who has not made any additional purchases within a specific timeframe, usually set by the business as a benchmark—commonly a year. These individuals have previously demonstrated their buying behavior and capacity, making them valuable targets for follow-up marketing and sales strategies.
Key Attributes:
- Non-purchase Period: Typically a year but can vary depending on the company’s standards.
- Prospective Value: Higher probability of future purchases compared to nonbuyers.
- List Deterioration: Value of contact lists declines over time as customers may move or change contact details.
Examples
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E-commerce Former Buyer: A customer who has not made a purchase on an online store for over a year may receive targeted re-engagement emails with exclusive discounts.
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Subscription-Based Business: A former subscriber who did not renew their annual subscription is contacted with promotional offers or reminders of the benefits they lost.
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B2B Sales: A corporate client who has not placed a purchase order for office supplies in over a year is a great candidate for personalized sales calls or deals.
Frequently Asked Questions (FAQs)
Why are former buyers important for businesses?
Former buyers represent a pool of individuals who have already expressed an interest in and capacity for purchasing from a business. They are hence more likely to repurchase compared to new customers.
Can former buyers be reactivated effectively?
Yes, many marketing strategies such as email campaigns with personalized deals, reminders, and loyalty programs can effectively reactivate former buyers.
How can businesses identify former buyers?
Businesses can use their CRM systems to track purchase history, automatically flagging customers who have not made purchases within the defined period.
What are the challenges associated with targeting former buyers?
The primary challenge is keeping contact information up-to-date, as customers may relocate or change their contact details, making it harder to reach them.
What are some common tactics to re-engage former buyers?
Targeted email campaigns, loyalty programs, retargeting ads, and special promotions are some of the common strategies used to re-engage former buyers.
Related Terms
- Customer Retention: Efforts made to keep existing customers and decrease the number of defections.
- Customer Segmentation: The practice of dividing a business’s customer base into groups that receive tailored messages and product offerings.
- Churn Rate: The percentage of customers who stop using a product or service during a given time frame.
- Reactivation Campaign: A marketing strategy aimed at former customers to encourage them to return or renew their subscription or purchase.
Online References
- HubSpot: Customer Retention Strategies
- Forbes: Why Your Customer’s Lapsed Purchase Can Be More Valuable Than a Prospect
- Salesforce: The Ultimate Guide to Customer Retention
Suggested Books for Further Studies
- Customer Retention: How to Collect, Measure, and Use Customer Loyalty Data by John A. Goodman
- Managing Loyalty: An Inside Look at Customer Retention by Lee G. Caldwell
- The Loyalty Leap: Turning Customer Information into Customer Intimacy by Bryan Pearson
Fundamentals of Former Buyer: Marketing Basics Quiz
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