Challenge

The client, a top home warranty provider, had a group of customers with previous contracts that did not renew automatically, resulting in a large pool of lapsed customers and a significant problem that the marketing team needed to try and solve quickly. Their goal was to reactivate these former customers a cost per sale of under $250.

Actions

To address this challenge, the company partnered with the RPM team and employed RPM's Rapid Performance Method, testing factors such as package format, offers, and list segmentation to quickly identify the most effective combinations. The initial pilot program involved mailing direct mail pieces across four separate campaigns, which allowed RPM to gather substantial data and crack the code for the most effective approaches to win-back the high value lapsed customers.

Results

The results from our initial tests far exceeded expectations. Through RPM’s test programs the company identified a winning combination of package format and offer. They also pinpointed key attributes that were highly predictive of a customer's likelihood of reactivation. But most importantly, the program successfully reactivated lapsed customers with a cost as low as $79 per sale, and far below the client's target of $250. These outstanding results provided a solid foundation to expand the program further.

Scaling and Continuous Improvement

1. Development of a Predictive Optimization Model:
   Beyond the initial testing, RPM developed a predictive model combined with a list segmentation strategy matrix. This sophisticated data-driven approach successfully led to even better reactivation rates and cost-efficiency.
   
   
2. Ongoing Creative Testing:
   RPM continued to conduct creative testing to uncover multiple high-performing “Control” package formats. These formats are used in rotation, with unique creative touches occurring at different times of the year. This strategic multi-control rotation prevents package fatigue and helps maintain higher levels of performance while aggressively mining the lapsed customer list to drive sales volume.
   
   
3. Program Expansion:
   The client has significantly scaled up the program, more than doubling its size while consistently driving sales at or below their financial targets. The Lapsed Customer direct mail initiative has become a crucial growth driver for the company, with double-digit average annual sales growth.

Exceeding Expectations

Using RPM's Rapid Performance Method, the clients transformed their lapsed customer reactivation strategy and demonstrated the power of direct mail to boost customer engagement, increase lifetime value, and drive significant growth. With ongoing testing, predictive modeling, and continuous optimization as the strategic framework, the program continues to grow and to exceed the client's goals. Learn more about how direct mail marketing can help your home services business.

Ready to take the next step? Contact us to discuss your unique challenges.

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