KPIs for Product Managers

KPIs for Product Managers: customer reactivation rate

Discover the importance of customer reactivation rate as a key performance indicator for product managers.

Product managers are constantly on the lookout for ways to improve the performance of their products, and one of the most important metrics they should be tracking is customer reactivation rate. But what exactly is customer reactivation rate, why is it important, and how can product managers improve it? In this article, we’ll answer these questions and more.

Understanding Customer Reactivation Rate

Customer reactivation rate is a metric that measures how many previously inactive customers have started using a product again. In other words, it's the percentage of customers who had stopped using a product for a period of time but have returned to using it within a specific time frame.

Reactivating customers is an important aspect of any business strategy. It's much easier and more cost-effective to retain existing customers than to acquire new ones. Reactivating customers can also provide valuable feedback on how to improve the product.

Definition of Customer Reactivation Rate

The formula for calculating customer reactivation rate is:

Customer Reactivation Rate = (Number of Reactivated Customers / Total Number of Inactive Customers) x 100%

For example, if a company had 1,000 inactive customers and was able to reactivate 200 of them, the customer reactivation rate would be 20% ((200 / 1,000) x 100%).

Importance of Customer Reactivation Rate in Product Management

While there are many metrics that product managers can use to measure the success of their products, customer reactivation rate is especially important because it indicates that a product has a loyal customer base that is willing to give it another chance. Reactivating customers can also provide valuable feedback on how to improve the product.

When a product has a high customer reactivation rate, it means that the product is still relevant and valuable to the customers. This can help the product team to identify what aspects of the product are working and what areas need improvement.

Factors Affecting Customer Reactivation Rate

There are several factors that can influence customer reactivation rate:

  • Product quality: If customers stopped using a product because of quality issues, they are less likely to reactivate. Therefore, it's important to ensure that the product is of high quality and meets the customers' needs.
  • Price: If customers found a cheaper alternative to a product they stopped using, they may not reactivate even if the original product is improved. Therefore, it's important to offer competitive pricing and value for money.
  • Competition: If a product faces strong competition, it may be difficult to reactivate customers who have switched to a competitor. Therefore, it's important to keep an eye on the competition and offer unique value propositions to stand out.
  • User experience: If a product has a poor user experience, customers may not be motivated to return. Therefore, it's important to ensure that the product is user-friendly and easy to use.

By understanding the factors that affect customer reactivation rate, product managers can take steps to improve the product and increase customer loyalty. Reactivating customers can be a valuable source of feedback and can help to identify areas for improvement.

Measuring Customer Reactivation Rate

Customer reactivation rate is an important metric for any business that wants to grow and retain its customer base. It measures the percentage of inactive customers who have been successfully re-engaged with the product or service. Measuring customer reactivation rate can help product managers identify areas for improvement and develop strategies to win back customers.

Identifying Inactive Customers

Before product managers can measure customer reactivation rate, they need to identify which customers are inactive. This can be done by analyzing product usage data or sending out surveys to customers who haven’t used the product in a while. By understanding the reasons why customers become inactive, product managers can develop targeted reactivation campaigns that address these issues.

For example, a software company may notice that a large number of customers become inactive after the free trial period ends. In this case, the company could offer a discount or other incentive to encourage these customers to upgrade to a paid plan.

Setting Reactivation Goals

Product managers should set realistic goals for their customer reactivation efforts. For example, they may aim to reactivate 10% of inactive customers within a specific time frame. By setting clear goals, product managers can measure the success of their reactivation campaigns and adjust their strategies accordingly.

It’s important to note that reactivating customers is often more cost-effective than acquiring new ones. Reactivated customers are already familiar with the product or service, so they require less marketing and sales effort to convert.

Developing Reactivation Campaigns

Once product managers have identified inactive customers and set reactivation goals, they can develop targeted campaigns to win back these customers. These campaigns may include personalized emails, special offers, or other incentives to encourage customers to return to the product or service.

For example, a clothing retailer may send a personalized email to a customer who hasn’t made a purchase in several months. The email could include a discount code or a special offer for the customer’s favorite product category.

Tracking Reactivation Rate Over Time

Product managers should track customer reactivation rate over time to identify trends and determine the effectiveness of their reactivation efforts. They can use this data to refine their reactivation campaigns and improve their overall customer retention strategy.

By measuring customer reactivation rate, product managers can gain valuable insights into their customer base and develop strategies to win back inactive customers. With the right approach, reactivating customers can be a cost-effective way to grow and retain a loyal customer base.

Strategies to Improve Customer Reactivation Rate

Customer reactivation is an important aspect of any business strategy. It involves targeting customers who have previously used a product or service but have since become inactive. Reactivating these customers can help businesses increase revenue and improve customer retention rates.

Personalized Re-engagement Campaigns

One effective strategy for reactivating customers is to create personalized re-engagement campaigns. These campaigns target specific segments of inactive customers based on their previous usage patterns. For example, if a customer previously used a product frequently but hasn’t used it in a while, a product manager could offer them a discount to entice them to return.

Personalized re-engagement campaigns can also be tailored to the customer’s preferences and interests. This could include offering them products or services that are similar to what they previously used or providing them with content that is relevant to their interests.

Incentives and Promotions

Offering incentives and promotions is another effective strategy for reactivating customers. This could include offering a free trial or providing early access to new features to entice customers to return.

Businesses can also offer loyalty rewards to customers who have been inactive for a certain period of time. This could include discounts, free products, or other perks that are exclusive to returning customers.

Enhancing Product Features and User Experience

If customers stopped using a product because of quality or user experience issues, product managers should address these issues to improve the chances of reactivation. This could include improving the product’s functionality, design, or user interface to make it more appealing to customers.

Product managers can also conduct user testing to identify any issues that may be preventing customers from using the product. This feedback can then be used to improve the product and make it more user-friendly.

Utilizing Customer Feedback

Product managers can also use feedback from previously inactive customers to improve the product and address any issues that may have contributed to their decision to stop using it. This feedback can be gathered through surveys, focus groups, or other forms of customer research.

By listening to customer feedback and addressing their concerns, businesses can improve their products and services and increase the likelihood of reactivating inactive customers.

Analyzing the Impact of Customer Reactivation Efforts

Customer reactivation is a crucial aspect of any business strategy. Reactivating dormant customers can help increase revenue, improve customer loyalty, and reduce churn rates. However, it is important to evaluate the success of reactivation campaigns to ensure that they are generating the desired results.

Evaluating the Success of Reactivation Campaigns

Product managers should analyze the effectiveness of their reactivation campaigns to determine which strategies are most effective and adjust their approach accordingly. This can be done by tracking metrics such as reactivation rate, revenue generated by reactivated customers, and customer satisfaction levels.

For instance, a product manager may find that a personalized email campaign is more effective in reactivating customers than a generic discount offer. By analyzing the data, they can refine their approach and focus on the strategies that are delivering the best results.

Measuring the ROI of Customer Reactivation

Measuring the return on investment (ROI) of customer reactivation efforts is crucial to ensure that the resources invested in these campaigns are generating a positive return. This involves comparing the cost of the reactivation campaign to the revenue generated by the reactivated customers.

For example, if a reactivation campaign costs $10,000 and generates $20,000 in revenue from reactivated customers, the ROI would be 100%. If the ROI is negative, it may be necessary to adjust the strategy or allocate resources elsewhere.

Identifying Areas for Improvement

If customer reactivation rates are not meeting expectations, product managers should identify areas for improvement and adjust their strategy accordingly. This could involve addressing product quality issues, improving the user experience, or refining their re-engagement campaigns.

For instance, if customers are not responding to email campaigns, it may be necessary to explore other channels such as social media or SMS. Alternatively, if customers are not reactivating due to product quality issues, the product team may need to address these issues before launching a reactivation campaign.

By continuously analyzing and refining their reactivation strategies, product managers can improve customer retention rates, increase revenue, and build a loyal customer base.


Customer reactivation rate is a key metric for product managers to track, as it can provide valuable insights into the loyalty and satisfaction of a product’s customer base. By understanding the factors that can influence customer reactivation rate and implementing effective re-engagement strategies, product managers can improve the performance of their products and drive growth for their businesses.