Pizzerias lose customers all the time, for any number of reasons, but it doesn’t have to be this way. With the proper strategy in place, it’s possible to win back your most valuable customers.
The Pizza Insider went to Kane Russell, head of marketing at Thanx, a technology company based in San Francisco that helps make customer marketing effortless for multi-location businesses and their customers, and asked about the top 5 ways to win back lost customers. The tips below come directly from Russell.
5 Ways to Win Back Lost Customers
By Kane Russell
|Kane Russell, Thanx|
The pizza industry can be summed up in two words: lucrative and competitive. In the U.S. alone, 73 thousand unique stores compete for 40 billion in annual sales. As such, any opportunity to earn incremental sales has to be seized, whether football promotions, vehicle ads, or customer retention marketing.
Fortunately, one of the best ways to earn incremental sales still remains largely untapped: customer winback marketing. The concept is simple — target previously loyal customers who seem to have stopped visiting and give them an incentive to return. If they do return, have a terrific experience, and go back to their previous visit frequency, pizza restaurants immediately earn sales that they would have otherwise lost to a competitor.
As a strategy, winback works because it targets the right customers at the right time. Previously loyal customers are the most cost effective to acquire given their existing relationship with the brand, and a personalized message sent before they go elsewhere has the highest chance of conversion. Tactically, however, winback requires a few best practices to ensure it’s done right. In no particular order:
1) Align winback promotions with individual customer frequency, NOT overall frequency.
Many pizza brands make the mistake of sending out winback promotions on a set timeframe, e.g. every 30 days or 60 days. The problem is that some extremely loyal customers only come in every 30 days or 60 days; sending them a winback promotion unnecessarily gives away revenue.
Instead, target winback offers according to individual customers frequency. Use whatever data you have. Transaction information works best (which you can get from a loyalty program) to figure out exactly when customers deviate from their average frequency. If transaction data isn’t possible, use other metrics instead. Email opens, for example, can be a proxy — once a customer stops opening email in the way they have in the past, they’re definitely at risk of going somewhere else.
Without any data at all, send out winback promotions according to new developments at your restaurant. Announcing new menu items or events, for example, can be a good way to reach customers who are less engaged with your brand than they were.
2) Winback above all else is about relationships — include language about re-connecting with your brand.
Oftentimes, pizza restaurants send winback offers focusing on the incentive, e.g. “Get $10 off if you come in during the next 7 days.” The problem with this messaging is that winback marketing is down funnel, i.e. you’re building loyalty, not awareness. So, a focus on the incentive converts discounters, not loyalists.
Instead, the messaging in a winback offer needs to include language focused on relationships, e.g. “We’ve noticed you haven’t been back recently — here’s $10 off to try out our newest menu item,” or “We’d love to see you again — here’s a complimentary item just for you.” With a focus on relationships, winback promotions convert at much higher rates.
3) Align the offer value with the customer's overall value to the business.
Many brands make the mistake of offering a blanket winback promotion to all customers. Unfortunately, giving $10 off to a customer who has spent thousands over their lifetime doesn't make sense
Instead, make sure the winback offer is commensurate with the customer's value for the business. Again, transaction data works best here, as you can essentially calculate different levels of incentives depending on customer tiers: high, medium, and low value.
If no transaction data is available, again, use the information you have. For example, restaurants with no data can provide a few special winback rewards cards for their location managers to hand out to folks they know, but feel like they haven’t seen in a while.
4) Make redeeming the offer as easy as possible for the recipient.
If you send a millennial customer a winback offer that requires printing out a piece of paper, you not going to see that millennial back in your pizza restaurant. Likewise, if you ask a customer to fill out a lengthy form to redeem their winback offer, you’re also going to see low redemption.
Instead, use new delivery channels for winback offers, e.g. mobile-optimized email or in-app coupons. For winback — just like anything in marketing — there are two hurdles to overcome: first, incentives have to be sufficient, and second redemption has to require as little effort as possible.
5) Remember, customers have to come back at least twice to count as “won back.”
When you do see a customer come in with a winback offer, do everything you can to make sure that customer has the best experience possible. A lot of unsuccessful brands make the mistake of resting on their laurels just by getting an at-risk customer to come back once.
The successful brands are those that transform a winback promotion into a consistent visitor. Above all, make sure you tell employees about the winback promotions, and instruct them how to approach previously loyal customers who return. Service of course has to be impeccable, but more important is actively asking customers how their experience can be improved. By personally engaging winback customers in-restaurant, you’ll see a dramatic increase in sales in the form or return visits from an often-ignored customer cohort.