Lapsed Customer: Definition, How to Spot One and Win Them Back
By Alva Chew · Updated
Definition A lapsed customer is someone who used to buy from you regularly and has not bought for longer than their normal gap. Set the window from how often your regulars actually visit, for example 90 days for a café or 180 days for a bakery. A points program lets you list lapsed members by name.
What is a lapsed customer?
A lapsed customer is someone who used to buy from you and has stopped. The word “lapsed” matters because nobody cancels. A regular who skips a month may be away, or may have found a new lunch spot, and your till cannot tell you which.
Researchers who model repeat buying meet the same problem. Fader, Hardie and Lee describe customers who buy at a steady rate and then become inactive, with the moment of dropout not observed by the firm. A gap in purchases is a signal to look closer, not proof the customer has gone.
Source: Fader, Hardie and Lee, “Counting Your Customers” the Easy Way, Marketing Science 24(2), 2005.
How long until a customer counts as lapsed?
Set the window from how often your regulars really come. Two rules fit most small businesses.
| Business | Illustrative lapse window | Why |
|---|---|---|
| Café or lunch spot | No purchase in 90 days | Regulars come every week or two |
| Bakery, restaurant or shop | No purchase in 180 days | A good customer may visit monthly or less |
These windows are our suggestions, not a researched standard. A customer who usually visits twice a year should not be called lapsed after 90 days. Keep the window fixed once chosen, so this quarter’s list can be compared with the last one. The same rule underlies churn, which counts lapsed customers as a share of the group you started with.
Is a lapsed customer the same as a churned customer?
For a café, restaurant or shop the two overlap almost completely. Lapsed is a label for one person. Churn is a rate across everyone. A lapsed customer who returns is “won back”, and it helps to count those separately so your customer retention rate is not flattered by returners.
What does research say about winning them back?
Thomas, Blattberg and Fox studied firms that try to restart relationships with former customers. For the application they modelled, the best strategy combined a low price to reacquire the customer with higher prices after they came back. The paper also covers which lapsed customers are worth targeting.
| Finding | Scope |
|---|---|
| A low reacquisition price followed by higher prices after reacquisition was optimal | One firm’s customer data, abstract only, no figures quoted here |
Source: Thomas, Blattberg and Fox, “Recapturing Lost Customers”, Journal of Marketing Research 41(1), February 2004.
Treat it as a pointer to test a small offer, not a rule. For the full routine, including why discounts do not fix a bad visit, see how to win back lapsed customers.
How do you rank lapsed customers by value?
Not every lapsed customer is worth the same effort. RFM analysis scores customers on recency, frequency and spend, so a lapsed customer who used to visit weekly and spend well ranks above one who came once. Start your conversations with that top group.
How do you find lapsed customers in a shop?
You need each visit tied to a person. A loyalty program gives every member an account, so listing members with no purchase inside your window takes a few minutes. The list covers members only, so say so when you report a count.
Lapsed customers with Gimify
A lapsed member keeps a points balance on their Google Wallet card, which you can mention when they come back. Gimify keeps one balance across every outlet, so a member who moved to another branch is one person. The free plan covers one outlet with unlimited members.
Questions owners ask
What is a lapsed customer?
A lapsed customer is a past buyer who has stopped buying for longer than their usual gap between purchases. They have not told you they are leaving. You infer it from the silence.
How long before a customer is lapsed?
It depends on your category. Use a window of several normal visit gaps. A café with weekly regulars might use 90 days and a bakery or restaurant might use 180 days. Write the rule down and keep it fixed so your counts can be compared.
What is the difference between a lapsed customer and a churned customer?
In a shop the two usually describe the same person. Lapsed is the status you give someone who has gone quiet. Churn is the rate of such customers over a period.
Can you win back lapsed customers?
Sometimes. Thomas, Blattberg and Fox (Journal of Marketing Research, 2004) studied winning back lost customers and found a low reacquisition price followed by higher prices worked best for the firm they studied. One firm's data is a reason to test a small offer, not a guarantee.
How do I find my lapsed customers without a loyalty program?
A till records sales, not people, so with cash or changing cards you mostly cannot. Members of a loyalty program have an account, so you can list who has not bought inside your window.
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