Hey retailers, let’s talk about a difficult subject: lapsed customers. Why? Because you might be losing out on significant future business, just because you’re giving up on certain customers
way too early. Generally, customers are considered “lapsed” once 12 months has passed since their last purchase. The customer record is flagged in a Y/N fashion, and just like that, the relationship is over. Marketing promotions, targeted advertising, contact strategy drop dramatically or stop completely. With its silence, the retailer sends a clear message: You don’t shop, so I don’t care about you anymore. But is this really the best practice for retailers to follow? There are still many open questions to consider. First, a customer’s frequency is not constant and does not necessarily comply with any calendar, fiscal or otherwise. In addition, a host of other factors may be in play, including unaided brand awareness, word-of-mouth, social exposure, targeted emails, and more. And in a world of digital, we keep forgetting that store signs are still a communication channel, even when people are out-and-about less frequently. Second, customers may shop a brand at specific intervals (holidays or clearances, for example), at specific times (soon after they get paid), or in anticipation of special events (weddings, graduations, holidays). The frequency needed to replenish certain items also varies widely. Think about how often you need to buy new clothes for church or new laptops for school and work. All this to say that a customer’s activity is more complex and unstructured than a fiscal calendar. Third, the sudden and dramatic shift of marketing dollars away from lapsed customers almost creates a self-fulfilling prophecy. The longer a customer does not shop, the less exposure to the brand they receive. This inevitably leads to lower awareness (aided and unaided), which increases the probability that the customer will continue not to shop.
