This definitely works well for me. I usually do a letter to a few hand-picked old clients, it's kinda standard but I change bits of it to tailor it to what I think each client would like.
For some I offer a discount, you know the ones that this will especially appeal to more than other things. Sometimes I'll offer a free glitter set instead of ordinary, or French for the price of natural, or a freebie product. Or the opportunity to purchase Gift Vouchers at 25% off at their next appointment. It's an ideal time to tell people about anything new you offer too.
I find people respond pretty well, out of every say 12 letters that I send (that's about how many I send to at a time) I'll get 2 or 3 responses which I reckon is not a bad percentage.
If they've lapsed for a while, for whatever reason, they can get a bit embarrassed sometimes; a letter (or something similar) welcoming them back into the fold can make them feel more comfortable.