Reactivating lapsed digital customers.
How do you use data and technology to drive frequency in a market where people already engage with the brand frequently?
Reading time: 4 minutes
The problem
Since July 2008 when Apple launched its App Store, over 3 million unique apps have been made available on Google Play, App Store, Windows Store and Amazon App Store. A phone’s home page is prime real estate.
Research shows that 76% of time is spent on the top 3 apps and 96% of time is spent on the top 10. Consequently, the problem for many brands is how to keep customers that have downloaded the app engaged and even more problematic, for apps that are also a sales channel, how to keep customers spending.
We were asked by a global fast-service food restaurant to run an experiment in one of their key APAC markets.
Despite having strong customer engagement with the app where guests could order food and drinks - click and collect or get it delivered - they wanted to grow the frequency of use, reactivate lapsed guests and bolster incremental revenue.
The tried and tested tactic of continuously sending out money-off coupons was no longer working.
The hypothesis
The challenge we had was that to increase incremental frequency we would need to encourage guests to visit more often, but the reality was many of them already visited a lot. Where others had tried to crack this conundrum and failed, we knew we had to break the cycle and do something different.
Rather than looking for meaningful patterns in what lapsed guests bought and comparing to active guests - we analysed transactional & behavioural data.
Experience told us that the best way to reach our objective was not to create new behaviours but to reinforce existing ones in order to reactivate lapsed guests.
This meant that we could deliver super-relevant messages that connected with individual guest’s missions - rather than selling a burger or a coffee, we were selling ease, convenience and value.
Our strategy
From quite early on we could see that there was no difference in pattern between the behaviour of lapsed and active app users reinforcing our hypothesis.
What we could see though was that there were actionable differences in the frequency of app usage and the likelihood of using a coupon in a transaction. We then identified some clear habit forming milestones - and layered them with the behaviours we were seeing in the analysis.
We quickly realised that the vast majority of guests fell into three distinct behavioural cohorts:
The Fan: These guys value the convenience of ordering via the app above all else (regardless of offer) and use it to access the brand across their daily lives - like a remote control. They account for 15 percent of guests but 55 percent of transactions. So our objective for this group was to maintain and grow their habitual app use.
The Promo Hunter: On the flip side we saw a group of guests who responded quickly and almost exclusively to promotional activity, but then resumed their normal habit and behaviour. They make-up 10 percent of guests and 5 percent of transactions. Our objective here was to build habit and manage the value we traded.
The Value Seeker: Keeping things really simple and actionable we defined one more group. These guys valued the convenience of the app and could be activated by promotions. We saw that they needed a clearly defined occasion or mission to engage. They were the largest group with 75 percent of guests and 40 percent of transactions - so our objective was to nurture them towards regular usage, maintain and grow their app habit.
Combining these and a whole raft of other insights meant we were able to diagnose the most important attribute for each cohort. For fans we needed to reinforce convenience. For value seekers we needed to inspire usage providing them with occasions and missions for use and finally we wanted to provide promotional junkies with a low risk easy way to use the app by offering dynamic pricing.
To support our hypothesis that the best way to reactivate lapsed users was to reflect previous behaviour meant that we landed on three occasions from a raft of suggestions that many of the guests had participated in previously and incentivised each:
Weekend occasions: Inspire family moments with a prompt to dine together at the weekend.
Delivery occasions: Offer lazy weekend moments to hard working guests with a nudge to enjoy breakfast delivery at the weekend.
Local occasions: Remind busy commuters that ordering breakfast with the app means they can beat the queues and make the morning commute less hassle.
Using a blend of Facebook ads and in-app coupons we ran the activity over a period of 8 weeks, including Christmas, Chinese New Year and a whole bunch of political and health related factors!
Results
We successfully proved that using past behaviour as a trigger rather than trying to establish new behaviour was an effective way to trigger lapsed users and significantly bolster incremental revenue.
Our activity drove incremental reactivation against a control by 136% and generated more than 3 times the value of incremental sales.
We literally turned this on its head to create the step change and answers they needed and we are now working to develop an always-on reactivation programme for them!
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