Loyalty glossary · 10. Marketing and engagement (20)
Reactivation
Reactivation is the process of restoring lapsed members to active earning or redemption, typically through a targeted offer, a rule change, or a corrected programme design. It is distinct from acquisition because it uses the operator's own data on why the member left.
Reactivation is the act of bringing a lapsed member back to active earning or redemption, and it is one of the most mispriced activities in loyalty management. It is not the same as acquisition, because the programme already holds data on why the member left and what they used to value. A reactivation campaign that ignores that data is a demand forecast wrapped in a discount.
The trap is uniformity. A member who lapsed after a devaluation of earn rates has a different problem from one who left because a hotel programme stopped counting third party stays. Sending both the same 2,000 point bonus spends most of the budget on members who will never return or will leave again at the next tier change. Segmentation by lapse reason is not a nice to have, it is the only way to avoid reactivating a liability.
A blanket reactivation offer of 1,000 points per member, costed at 1 cent per point, spends 10 dollars on every lapsed account before anyone responds. If only 5 percent of those accounts reactivate, the offer has cost 200 dollars per returning member. That is only defensible if a returned member is worth at least 200 dollars in incremental profit over 12 months.
Before any reactivation spend, a programme should know its active member rate and how that rate has changed over 6 months or 12 months. Then it should set an activity based qualification rule, such as 3 months without earn, not 24 months, because the longer the absence the lower the chance of return. Accrual economics then decide whether the returning member can earn back the offer cost.
Reactivation should be a standing discipline, not a one off campaign. A response rate of 10 percent on a single offer tells nothing about the profitability of those who return, because many will lapse again after the bonus is spent. The only metric that matters is incremental contribution after the cost of the offer. Programmes that measure reactivation success by redemptions or clicks are budgeting for churn, not for recovery.