Revitalizing Lapsed Customers

An orphan can be defined as “One who lacks support, supervision or care”.

How many do you have in your CRM database? How many customers have simply become dormant and shuffled into an inactive or unassigned category?

In a recent conversation with my client from a major life insurance carrier, I was appalled to learn that her company had well over 100,000 orphaned policyholders. In insurance-speak, these are folks who originally purchased a policy from an agent, but were never assigned to another agent after that agent left the company.

Many industries have a similar category in their database. Inactive bank accounts, infrequent flyers, one-time visitors… the list goes on. It gets me thinking: how many organizations could use a shot in the bottom-line? This category represents a huge untapped asset:

1.     Orphans are never contacted. You have forgotten about them, and they have forgotten about you. How likely are they to ever upgrade or buy another product or service from you?

2.     If your competition is effectively marketing—and you know they are—how many competing offers can your orphans resist? Retention rates suffer when customers are ignored.

Let’s put some dollars and sense behind a simple illustration exercise:


With the potential for this scope of increased revenue, it makes no sense to me that so many companies devote little to no attention to their orphaned customers. Political turf issues over account reassignment? Possibly. “Don’t rock the boat” and “Let sleeping clients lie” mentality?  Maybe. Inertia? Most likely.

A major hotel chain recently develop a multi-pronged marketing campaign to revitalize its “dormant” clients: those who had not booked a room within the previous 24 months. After modeling its data against the frequent guests and resoliciting a predictive-modeled group with an offer, the hotel generated an ROI of 1,090%. And I can predict similar successes in your own organization.

So take a look at your entire customer file. Find those pockets of orphaned customers who have been ignored for whatever reason. Develop a strategy to solicit them with a product offering using a predictive model–driven approach. The incremental revenue generation and low acquisition costs are likely to amaze you, and will demonstrate once again the truism that your best customers are your current customers.

Mark Weishaar is owner and president of Malvern Marketing Group LLC

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