Microns: Solving the Customer Reactivation Problem (Part 6)

The Business Case

In India, there are about 400 million email users. Let’s assume that the transactors are about 25% of those – so about 100 million. Let’s further assume that each of these users has about 50 brand relationships – across all the ecommerce categories, media, OTT, telecom, travel, retail, banking and finance, and social. Each of us will at least have 10 dormant relationships. So, that makes for a billion dormant brand-customer relationships. Brands have spent at least Rs 100 in acquiring each of these customers so that is about Rs 10,000 crore which lies wasted. Assuming brands are willing to pay Rs 10 to reawaken a customer, this is a Rs 1,000 crore market opportunity for microns – 5 times the total market size for email in India.

Let us look at it from the brand side. About a third of the brand’s customer base is likely to be dormant. (We had taken 50% in the Rest customers category – assuming a third of them are unreachable for various reasons, we come to the same 33% figure of the overall customer base.) A snippet from V12 suggests even higher numbers: “According to a Marketing Sherpa study, upwards of 75 percent of email subscribers are inactive… Approximately 25 percent to 30 percent of contact data goes bad each year under normal circumstances.”

Reactivation is a problem for every brand. The same idea of reactivation using microns can be taken globally. With 4 billion email users worldwide (10 times that of India), the global opportunity for microns is easily Rs 10,000 crore (about $1.3 billion) – probably much greater.

Reactivation hasn’t been looked at seriously since it falls between the two stools of acquisition and engagement. The adtech team wants to acquire new customers – which is also what the top management would like to see and show. The martech team wants to drive engagement and retention, and ignores customers who were once new but are now inactive. No one is responsible for reactivation. This is the whitespace for marketers – it can give faster success at lower spends. (But which marketer wants to lower their spending budget?!)

The compelling economics of microns can make reactivation as the new acquisition. Combined with Velvet Rope Marketing (VRM) for the Best customers, this can be the second cannonball that smart marketers can fire to accelerate growth and increase profits. After all, it is better to reconnect with forgotten friends than approach strangers!

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.