The Personal MBA

Master the Art of Business

A world-class business education in a single volume. Learn the universal principles behind every successful business, then use these ideas to make more money, get more done, and have more fun in your life and work.

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What Is 'Reactivation'? (Sales)

Reactivation is the process of convincing past customers to buy from you again.

Reactivation is a quicker, simpler and more effective way of increasing revenue than attracting new customers, because those who are reactivated already know you and trust you. Your cost of customer acquisition is extremely low.

Reactivation works better if you have Permission from your customers to follow up.

Reactivation is a great strategy to go back to every now and then to increase revenue.

Josh Kaufman Explains 'Reactiviation'

We think of sales as the process of convincing prospects to become customers. Winning new customers, however, is costly and time-intensive. What if there was another way to bring in additional revenue at very little additional cost?

Reactivation is the process of convincing past customers who haven't done business with you in a while to buy from you again.

If you've been in business for a while, you'll inevitably have some "lapsed" customers-people who have already purchased from you, but haven't purchased for quite some time. You know they're interested in what you have to offer, and you probably already have their contact information. Why not present them a new offer to make them an active customer once again?

Netflix is a company that uses reactivation brilliantly. If you cancel a Netflix subscription, three to six months later you'll receive a postcard and/or e-mail invitation from Netflix with an offer to re-subscribe at a reduced rate. If you don't reply, they'll send another a few months later with a different offer, continuing the offers until you re-subscribe or request to be removed from their system. Since Netflix is a subscription business, every reactivated customer means a new monthly stream of income, which greatly enhances the Lifetime Value of each customer.

Reactivation is typically a quicker, simpler, and more effective approach to increasing revenue than attracting new customers. Your old customers already know and trust you, and they're aware of the value you provide. You have their information-you don't have to find them. Your cost of customer acquisition (a component ofAllowable Acquisition Cost) is almost zero - all you have to do is contact them and present an attractive offer.

Reactivation is much simpler if you have Permission from your customers to follow-up. Your list of prospective customers is a valuable asset, but your list of past customers is just as valuable. By obtaining permission from your customers to follow-up with them, you increase the probability of Reactivation if they-for whatever reason-stop buying from you.

Most Point-of-Sale (POS) systems keep track of customer data - who purchased, and when the sale was made. It's relatively simple to extract a list of customers who haven't purchased from you in a while, then present them a Reactivation offer directly via e-mail, phone call, or postal mail. Reactivation campaigns are consistently the easiest and most profitable marketing activities you'll ever try.

Make it a priority every three to six months to re-contact your lapsed customers with another offer to see if you can encourage them to start buying again, and you'll be amazed by the results.

Questions About 'Reactiviation'


"Every company's greatest assets are its customers, because without customers there is no company."

Michael LeBoeuf, business professor and author of How to Win Customers and Keep Them for Life


From Chapter 3:

Sales


https://personalmba.com/reactivation/



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The Personal MBA

Master the Art of Business

A world-class business education in a single volume. Learn the universal principles behind every successful business, then use these ideas to make more money, get more done, and have more fun in your life and work.

Buy the book:


About Josh Kaufman

Josh Kaufman is an acclaimed business, learning, and skill acquisition expert. He is the author of two international bestsellers: The Personal MBA and The First 20 Hours. Josh's research and writing have helped millions of people worldwide learn the fundamentals of modern business.

More about Josh Kaufman →