Former Buyer

Definition

A former buyer refers to a customer who has not made any additional purchases within a specific timeframe, usually set by the business as a benchmark—commonly a year. These individuals have previously demonstrated their buying behavior and capacity, making them valuable targets for follow-up marketing and sales strategies.

Key Attributes:

Non-purchase Period: Typically a year but can vary depending on the company’s standards.
Prospective Value: Higher probability of future purchases compared to nonbuyers.
List Deterioration: Value of contact lists declines over time as customers may move or change contact details.

Examples

E-commerce Former Buyer: A customer who has not made a purchase on an online store for over a year may receive targeted re-engagement emails with exclusive discounts.
Subscription-Based Business: A former subscriber who did not renew their annual subscription is contacted with promotional offers or reminders of the benefits they lost.
B2B Sales: A corporate client who has not placed a purchase order for office supplies in over a year is a great candidate for personalized sales calls or deals.

Frequently Asked Questions (FAQs)

Why are former buyers important for businesses?

Former buyers represent a pool of individuals who have already expressed an interest in and capacity for purchasing from a business. They are hence more likely to repurchase compared to new customers.

Can former buyers be reactivated effectively?

Yes, many marketing strategies such as email campaigns with personalized deals, reminders, and loyalty programs can effectively reactivate former buyers.

How can businesses identify former buyers?

Businesses can use their CRM systems to track purchase history, automatically flagging customers who have not made purchases within the defined period.

What are the challenges associated with targeting former buyers?

The primary challenge is keeping contact information up-to-date, as customers may relocate or change their contact details, making it harder to reach them.

What are some common tactics to re-engage former buyers?

Targeted email campaigns, loyalty programs, retargeting ads, and special promotions are some of the common strategies used to re-engage former buyers.

Customer Retention: Efforts made to keep existing customers and decrease the number of defections.
Customer Segmentation: The practice of dividing a business’s customer base into groups that receive tailored messages and product offerings.
Churn Rate: The percentage of customers who stop using a product or service during a given time frame.
Reactivation Campaign: A marketing strategy aimed at former customers to encourage them to return or renew their subscription or purchase.

Online References

Suggested Books for Further Studies

Customer Retention: How to Collect, Measure, and Use Customer Loyalty Data by John A. Goodman
Managing Loyalty: An Inside Look at Customer Retention by Lee G. Caldwell
The Loyalty Leap: Turning Customer Information into Customer Intimacy by Bryan Pearson

Fundamentals of Former Buyer: Marketing Basics Quiz

### Who is a former buyer? - [ ] A customer who has never purchased a product. - [ ] Any customer that frequently buys products. - [x] A customer who has not made any additional purchases within a specified period of time. - [ ] A customer that only buys products during a sale. > **Explanation:** A former buyer is defined as a customer who has not made any additional purchases within a specified timeframe, typically a year. ### Why are former buyers deemed better prospects than non-buyers? - [ ] They have a loyalty card. - [x] They have shown a willingness and ability to buy. - [ ] They receive regular newsletters. - [ ] They follow social media updates. > **Explanation:** Former buyers are generally seen as better prospects for additional sales because they have already demonstrated a willingness and ability to make purchases. ### What is a common time frame used to classify a former buyer? - [ ] One week - [ ] One month - [ ] Six months - [x] One year > **Explanation:** The common time frame used to classify a former buyer is usually a year, though this can vary by company. ### What factor leads to the decline in value of lists of former direct-mail buyers over time? - [x] Customers moving to a new address - [ ] Changes in product inventory - [ ] Introduction of new technology - [ ] Seasonal shifts in marketing > **Explanation:** Lists of former direct-mail buyers decline in value over time because many customers will have moved to a new address, making it harder to reach them. ### What is one tactic businesses use to re-engage former buyers? - [ ] Ignoring them - [x] Sending targeted email campaigns - [ ] Increasing product prices - [ ] Reducing customer service efforts > **Explanation:** One common tactic used to re-engage former buyers is sending targeted email campaigns. ### What term refers to efforts made to keep existing customers and prevent defection? - [x] Customer Retention - [ ] Customer Acquisition - [ ] Customer Segmentation - [ ] Upselling > **Explanation:** Customer retention refers to the efforts made to keep existing customers and decrease the number of defections. ### Which marketing strategy aims to encourage former customers to return or renew their subscription? - [ ] Acquisition Campaign - [x] Reactivation Campaign - [ ] Loyalty Program - [ ] Content Marketing > **Explanation:** A reactivation campaign aims to encourage former customers to return or renew their subscription or purchasing activity. ### What is the churn rate? - [ ] The rate at which new customers are acquired. - [x] The percentage of customers who stop using a product or service during a given time frame. - [ ] The number of customers in a loyalty program. - [ ] The average time taken to service a customer request. > **Explanation:** The churn rate is the percentage of customers who stop using a product or service during a given time frame. ### How can businesses track former buyers? - [ ] Social media channels - [x] Customer Relationship Management (CRM) systems - [ ] Printed newsletters - [ ] Product catalogs > **Explanation:** Businesses can track former buyers using their Customer Relationship Management (CRM) systems to flag customers who haven't made purchases within a defined period. ### What is one key challenge of targeting former buyers? - [ ] Keeping up with new inventory. - [x] Keeping contact information up-to-date. - [ ] Developing new branding strategies. - [ ] Managing social media presence. > **Explanation:** The primary challenge associated with targeting former buyers is keeping contact information up-to-date as customers may relocate or change their contact details.

Thank you for exploring the concept of the former buyer and testing your knowledge through our quiz. Keep enhancing your expertise in marketing and customer relationships!