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Estd 4.22.2023
In the competitive landscape of SaaS businesses, acquiring new customers represents only half the battle. The often-overlooked counterpart is reactivating dormant users—those who have stopped engaging with your product but haven't formally churned. This resurrection of dormant users can significantly impact your bottom line, often at a fraction of new customer acquisition costs.
Why Dormant User Resurrection Matters
According to research from Harvard Business Review, acquiring a new customer can cost 5 to 25 times more than retaining an existing one. While this statistic typically applies to retention, the same principle extends to resurrection—reactivating users who already know your product requires less resource investment than educating completely new prospects.
Forrester Research indicates that increasing customer retention rates by just 5% can increase profits by 25% to 95%. By measuring and optimizing your resurrection rate, you tap into this same financial efficiency.
Defining the Resurrection Rate
The resurrection rate measures the percentage of dormant users who return to active usage within a specific timeframe. Before calculating this metric, you must establish clear definitions:
- Active User: Define what constitutes an "active user" for your specific product (e.g., logged in within 30 days, completed a core action, etc.)
- Dormant User: Establish when a previously active user becomes dormant (e.g., no login for 60+ days)
- Resurrection: Determine the criteria for considering a dormant user "resurrected" (e.g., completes a core action after dormancy)
The Resurrection Rate Formula
The basic formula for calculating resurrection rate is:
Resurrection Rate = (Number of Resurrected Users / Total Dormant Users) × 100For example, if you had 1,000 dormant users at the start of the quarter, and 150 of them returned to active usage, your resurrection rate would be 15%.
Setting Up Your Measurement Framework
To accurately calculate your resurrection rate, follow these steps:
1. Define Your Timeframes
Resurrection analysis requires defining two key timeframes:
- Dormancy Period: The period after which an inactive user is classified as dormant
- Measurement Period: The timeframe during which you'll measure resurrections
For example, you might define users inactive for 90+ days as dormant, then measure resurrections over the following quarter.
2. Segment Your Dormant Users
Not all dormant users are equal. Consider segmenting by:
- Usage History: Heavy past users vs. light users
- Subscription Tier: Enterprise vs. mid-market vs. small business
- Lifetime Value: High-value vs. low-value customers
- Dormancy Duration: Recently dormant (60-90 days) vs. long-term dormant (180+ days)
According to Mixpanel's industry benchmarks, recently dormant users typically resurrect at 3-5x the rate of users dormant for 6+ months.
3. Track Resurrection Events
Implement proper event tracking to capture when dormant users return. This typically involves:
- Login events after dormancy
- Completion of core value actions after dormancy
- Renewal or re-subscription events
Advanced Resurrection Metrics
Beyond the basic resurrection rate, consider these advanced metrics:
Resurrection Retention
Resurrection Retention Rate = (Resurrected Users Still Active After 30 Days / Total Resurrected Users) × 100This measures how "sticky" your resurrection efforts are. According to data from Amplitude, successful resurrections typically show a 60%+ 30-day retention rate.
Resurrection ROI
Resurrection ROI = (Revenue from Resurrected Users - Cost of Resurrection Campaigns) / Cost of Resurrection CampaignsThis helps quantify the business value of your resurrection efforts compared to acquisition campaigns.
Cohort-Based Resurrection Analysis
Track resurrection rates by cohort (when users originally signed up) to identify patterns. According to research by Profitwell, users who initially engaged deeply with your product and then became dormant are 2-3x more likely to successfully resurrect.
Implementing Resurrection Strategies
With your measurement framework in place, implement targeted strategies:
- Re-engagement Campaigns: Use email sequences highlighting new features or use cases
- Winback Offers: Provide special incentives for returning users
- Product Updates: Focus on removing the barriers that likely caused dormancy
- Education: Provide resources addressing common points of friction
Netflix, for example, achieves an estimated 33% resurrection rate through personalized recommendations and "we've added shows you might like" messaging to dormant subscribers, according to analysis from Second Measure.
Common Pitfalls in Resurrection Analysis
Avoid these common mistakes:
- Insufficient Segmentation: Not all dormant users should be approached the same way
- Confusing Resurrected with New: Ensure your analytics properly distinguishes returning dormant users from new signups
- Ignoring Resurrection Quality: Focus on meaningful reengagement, not just a single login
- Failure to Investigate Dormancy Causes: Without addressing root causes, resurrections will be temporary
Conclusion
Calculating and optimizing resurrection rate represents a significant opportunity for SaaS businesses. With user acquisition costs continuing to rise, the ability to reactivate dormant users provides a cost-effective growth lever.
By implementing proper measurement frameworks and targeted resurrection campaigns, you can unlock substantial value from users who are already familiar with your product. Remember that successful resurrections aren't just about bringing users back—they're about ensuring those users find renewed value in your product.
For maximum impact, make resurrection rate a standard component of your metrics dashboard and review it alongside acquisition and retention metrics. The most successful SaaS businesses recognize that a comprehensive growth strategy must address all three dimensions: acquisition, retention, and resurrection.